As I write this, the tech community is eagerly awaiting the next big reveal from Apple (AAPL). This time around, Apple is featuring its new line of iPads, including the iPad Air 2 and iPad mini 3.
Can Apple keep up the momentum as it heads into the holiday shopping season?
Company Profile
From tablets to smartphones to mp3 players, Apple has made its mission to put the “i” in consumer electronics. Apple’s iPod and iTunes lead the digital music industry, and the iPhone is one of the hottest smartphones out there.
AAPL also hasn’t forgotten its personal computing roots and has cut into the dominance of Windows with its OS X operating system and fleet of Mac computers. Apple is a regular in the major market headlines, as consumer appetite for its products seems to be nearly insatiable.
People around the world will gladly stand in line for hours, even days, to be among the first to get their hands on the next generation of products.
Future Outlook
Apple always has something in the works. Last month, Apple released the iPhone 6 (and the larger iPhone 6 Plus model). The iPhone 6 sold a record 10 million units in the first three days after hitting shelves in the U.S. Starting tomorrow, the iPhone 6 and iPhone 6 Plus will begin rolling out in 36 additional countries — including India and China. By the end of the month, the newest iPhone will be available in 69 countries and territories.
Today, all eyes are on the Apple’s next line of iPads.
All of these developments translate into strong sales and earnings projections for the next several quarters. For the current quarter, Apple is expected to post 6.3% annual sales growth and 10.2% earnings growth. For the following quarter, those estimates improve to 10.2% sales growth and 15.5% earnings growth. Apple is also expected to see double-digit annual earnings growth for both FY 2014 and FY 2015. By comparison, the rest of the industry is headed towards 9.4% earnings growth for fiscal 2014 and a 2.2% drop in earnings for fiscal 2015.
Current Ratings
Apple stock is one of the biggest comeback stories of the year. As recently as last Nov., AAPL earned a “D,” indicating a “sell” recommendation. Since then, AAPL has been successful in turning around its balance sheet and attracting more institutional buying pressure. Currently, AAPL stock earns a “B” for its Fundamental Grade, owing to strong earnings growth (B), earnings momentum (B), cash flow (B), and return on equity (A).
For the moment, Apple could improve sales growth (C), earnings surprises (C) and operating margin growth (C). Meanwhile, AAPL receives an “A “for its Quantitative Grade, placing the stock firmly in “buy” territory
As of this posting, Oct. 16, I consider AAPL an “A-rated strong buy.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth
, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
