Apple’s Rally Makes Valuation Look Frothy

Shares of Apple (AAPL) climbed to an 8-month high Wednesday and are up +29% for the year.  That has pushed the stock to an elevated valuation that may be tested after today’s close when it reports Q2 earnings results.  The consensus is for Apple’s Q2 revenue to fall by -4.8% and earnings to slide by -5.8% as sales fall for the first time since 2019.

Some analysts are concerned that the rally in Apple may have gotten ahead of itself.  Artisan Partners said, “Apple has to grow a lot to generate good returns from here, and there’s no reason to think the growth it has seen over the past several years will continue at that pace.”  Also, UBS Group AG on Monday warned that U.S. iPhone demand had “notably softened” in March.