Can an Apple Event Breathe New Life Into AAPL Stock?

The rumor mill’s been churning away on Apple’s (AAPL) annual fall event, and recent reports claim Apple’s event will be held the week of September 7 — most likely on Wednesday, Sept. 9.

Can an Apple Event Breathe New Life Into AAPL Stock? While this date has yet to be confirmed by the Apple, the media is running full-speed ahead with the plans.

Because Apple typically holds two events (one for its next-generation iPhone reveal, the other for its iPad lineup) nobody knows quite what to make of the event.

Here’s what media, analysts and Apple enthusiasts are expecting to see next month:

  • An iPhone Upgrade: The new iPhone 6 and iPhone 6 Plus were released in September 2014, so this fall’s event will likely mark the release of the “s” versions of each of those devices. A jump over the 6s and directly to an iPhone 7 is also possible, but not very likely. Advancements in Siri, battery life and the camera are all possible, as well as the incorporation of “Force Touch,” where a light tap on the screen produces a different result than a longer, firmer touch. Force Touch is already in use in the Apple Watch and MacBook laptops.
  • Revamped iPads: While Apple has previously held separate events to release new versions of the iPad and iPhone, this year’s event will likely be a combined product launch as the current line of iPads is struggling — its market share dropped nearly 18% year-over-year in the second quarter. Current rumors are calling for a new version of both the iPad Mini and the iPad Air, and some are even looking for a new product — the iPad Pro. But that is a wild card at this point.
  • An Apple TV Refresh: Apple TV hasn’t seen an update since a minor revision was made in 2013, which makes it well overdue for a refresh. As competitors such as Google (GOOG, GOOGL) Chromecast and Amazon (AMZN) Fire TV swoop in to threaten AAPL’s market share in the TV space, everyone is expecting a fourth-generation Apple TV, replete with a full App Store, touch-based remote control and more.

Apple has come under pressure recently for a number of reasons: the broad market volatility, turmoil in China and the second-quarter earnings season, just to name a few. As a result, the stock fell from a near-term high of $132.96 on July 20 to as low as $109.63 early Wednesday. That’s a 17.5% pullback, and certainly the most severe one Apple has seen this year.

With the recent weakness, AAPL trades at a relatively attractive valuation of 13.4 times trailing earnings and just 11.9 times expected earnings in 2016. The company also pays out $2.08 per share in annual dividends, giving it a current yield of 1.8%. Not great, but not terrible either.

However, AAPL has weakened technically with the stock now trading below two key moving averages — the 50-day and 200-day. Lower-than-expected guidance resulted in a 4% hit for the stock the day after earnings were released on July 21, and the trend has been mostly down since.

In the larger picture, the ever-present question surrounding Apple is whether growth will get harder to come by as the company gets bigger and bigger. Current expectations are for earnings to grow nearly 14% a year for the next five years, which is down from 22.5% the past five years.

My feeling is that AAPL will move higher over time, but near-term movement is much harder to predict.

There are a lot of crosscurrents affecting the stock and the market right now, and on a company with an unbelievable $660 billion market cap, it takes an awful lot to move the needle.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/08/apple-aapl-apple-stock/.

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