Consumer electronics giant Apple will report June-quarter results late Thursday and Wall Street's expectations are pretty low. Still, AAPL stock has been climbing ahead of the news.
Analysts polled by FactSet expect the Cupertino, Calif.-based company to earn $1.16 a share on sales of $82.8 billion in its fiscal third quarter. That would translate to a year-over-year decline of 11% in earnings with sales up less than 2%.
Three months ago, Apple warned that Covid-related shutdowns in China would negatively impact its June-quarter performance. It also faces weakening consumer spending and macroeconomic headwinds.
However, AAPL stock has been rising ahead of its earnings report. It has been consolidating for the past 30 weeks with a buy point of 183.04, according to IBD MarketSmith charts. That buy point is 10 cents above the stock's all-time high 182.94, reached on Jan. 4, based on IBD trading guidelines.
On the stock market today, AAPL stock jumped 3.4% to close at 156.79.
AAPL Stock Could See Pullback On Guidance
Risks are rising for Apple but they already are reflected in AAPL stock price, Deutsche Bank analyst Sidney Ho said in a note to clients this week. He rates AAPL stock as buy with a price target of 175.
Ho expects Apple to fare better than its peers despite a challenging environment.
"We believe the company has managed its supply chain better than it planned a quarter ago, while it continued to gain share in an otherwise difficult quarter for smartphones and PCs," Ho said. "Looking forward, we expect Apple's outlook to lean more cautious to reflect the current environment."
BofA Securities analyst Wamsi Mohan predicts that Apple will beat analyst estimates modestly with its June-quarter report. However, its guidance for the September quarter likely will drive Wall Street forecasts lower, he said. Mohan rates Apple stock as buy with a price target of 185.
"Given the recent rally in shares, we would not be surprised to see a transitory pullback on a weaker guide," Mohan said in a note to clients Tuesday. But he remains bullish on AAPL stock because of upcoming products, long-term growth in services and strong capital returns.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
