- Apple (AAPL) recently served up excellent fiscal results, but not every analyst is in the bull camp.
- However, a deep dive into the data ought to quell the skeptics’ concerns, even in the face of supply-chain issues.
- Investors should hold onto their Apple shares and possibly add more when the price dips.
There’s no denying that Cupertino, California-headquartered Apple (NASDAQ:AAPL) is a technology-gadget king. Yet, AAPL stock has struggled to stay afloat lately – but that’s not a reason for investors to just abandon ship now.
It’s fascinating to see certain phrases gain traction in the financial media. In 2022, the term “supply chain” seems to pop up in the news again and again. You’ll also see that phrase repeatedly in tech companies’ financial reports.
That’s perfectly understandable, as supply chains can profoundly affect technology companies’ performance. Without a doubt, supply-chain problems have been a contributing factor in the under-performance of AAPL stock this year.
Still, it’s an encouraging sign that Apple can continue to deliver strong fiscal results despite supply-chain challenges. Wall Street’s analysts don’t all agree on the outlook for Apple, but we can let the data be our guide. In the final analysis, Apple’s overall fiscal picture looks largely positive.
What’s Happening with AAPL Stock?
With a broad-based tech-stock rout in progress, it’s unreasonable to solely blame Apple for the decline in its share price. Still, it can be uncomfortable to watch AAPL stock flail around like a fish out of water.
Still, the stock has held its ground fairly well and the downturn has given market participants a nice opportunity. Indeed, Apple’s trailing 12-month price-to-earnings ratio of 25.34 indicates a very reasonable valuation.
Unfortunately, Apple’s second-quarter 2022 financial results weren’t the positive catalyst that the bulls were undoubtedly hoping for. As AAPL stock flops wildly, investor might be led to believe that Q2 was a bad quarter for Apple.
Let’s see what the data actually tells us. As it turned out, Apple served up a March-quarter revenue record of $97.3 billion, marking a year-over-year improvement of 9%.
Turning to the bottom line, Apple posted Q2 2022 earnings per share (diluted) of $1.52, easily beating the prior-year quarter’s $1.40. That’s an impressive feat, given this year’s supply-chain constraints.
Apple CEO Tim Cook proudly stated, “This quarter’s record results are a testament to Apple’s relentless focus on innovation and our ability to create the best products and services in the world.” He might be slightly overstating the significance of Apple’s quarterly results, but the data was fairly decent overall.
He Said, She Said
Apple’s results were just fine, but some Wall Street experts are difficult to please. Thus, Rosenblatt analyst Barton Crockett recently slashed his price target on AAPL stock from $184 to $168.
Rosenblatt also assigned a “neutral” rating on the stock, which isn’t exactly a ringing endorsement. Apparently, the analyst cited expectations of larger supply-chain disruptions in the June quarter, but still called Apple’s quarterly report “constructive.”
In contrast, Morgan Stanley analyst Katy Huberty reiterated her “overweight” rating on AAPL stock while assigning it a price target of $195. Evidently taking a glass-half-full approach, Huberty observed positive App Store revenue trends in China, Japan and South Korea.
“The improved positioning in these regions more than offset weaker growth in the US,” she assured. Moreover, Huberty has a positive outlook for Apple’s June quarter in this segment, modeling 15% year-over-year App Store revenue growth to $7.2 billion.
What You Can Do Now
Analysts aren’t going to see Apple’s future in the same way, but that’s perfectly fine. The experts can agree to disagree, and informed investors can make their own decisions.
Concerning Apple, the fiscal stats seem to support a bullish stance overall. Also, Apple’s reasonably low P/E ratio suggests that there’s good value here.
At the end of the day, you can align your AAPL stock investment strategy with Rosenblatt’s $168 price target, or with Huberty’s price objective of $195. Or better yet, consider Apple’s impressive performance despite the supply-chain woes, and just hold your shares for the long term.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
