Apple’s stock returns
In this series, we’ll look at the performance of technology hardware stocks in the first half of 2018. This year, the overall markets have been choppy, compared to the bull run experienced in 2017. The S&P 500 ETF (SPY) has risen more than 2.5%, and the Invesco QQQ Trust ETF (QQQ) has risen more than 10.5% this year.
Apple (AAPL) stock returned 10.3% in the first half of 2018. The stock closed at $185.11 on June 29. Apple beat its earnings estimates in the fiscal second quarter[1. fiscal Q2 2018 ended March 31, 2018] by 2.2% and by 0.8% in the fiscal first quarter.[2. fiscal Q1 2018 ended December 30, 2017] Analysts have a median price target of $200.00 for Apple, which indicates that the firm has an upside potential of 8.0% over the next 12 months.
iPhone and Services business expected to drive Apple’s revenues
Apple’s iPhone revenues rose 14.0% YoY (year-over-year) in the fiscal second quarter. The tech giant has reported sales of more than $100.0 billion in this segment over the last two quarters. This has been Apple’s best six-month performance in the last three years. The iPhone accounts for 60.0% of Apple’s total revenues, and this product is expected to drive revenues in fiscal 2018.
Apple’s Services segment’s revenues rose 29.0% YoY in the last two quarters to $18.0 billion. This has been Apple’s fastest-growing segment and is as large as a Fortune 100 company.
Analysts expect Apple’s revenues to rise 14.9% YoY to ~$261.2 billion in fiscal 2018 and 4.3% YoY to $272.0 billion in fiscal 2019. The company’s earnings per share are expected to rise 25.0% to $11.49 in fiscal 2018 and 15.4% to $13.26 in fiscal 2019.