Apple (AAPL) shares have risen 1.8% today. The stock is trading at $227.05. Currently, the stock is valued at $1.03 trillion. Apple shares gained more than 2% on Monday after J.P. Morgan raised its 12-month target price on the stock.
Apple stock has gained 44% year-to-date. The stock has easily outperformed the Dow Jones Industrial Average and the S&P 500. The Dow Jones has returned 15.6%, while the S&P 500 has gained 18.5% in 2019.
Despite the impressive run this year, Apple stock traded flat in the last 12 months. The stock lost more than 30% in market value in the last quarter of 2018. Analysts and investors were concerned about falling iPhone sales and the trade war between China and the US.
Although trade war issues remain, they have de-escalated. The US-China trade talks have started again. Analysts are optimistic about the demand for Apple’s latest line up of iPhones.
iPhone key for Apple investors
Apple wants to diversify its revenue base and reduce its dependence on the iPhone. The company introduced new services last month like Apple TV+ and Apple Arcade. However, the iPhone accounted for 48% of Apple’s total sales in the June quarter. The iPhone is still the company’s key revenue driver.
The initial demand for the iPhone 11 line up is more than encouraging. The company has a chance to have two bumper years of iPhone sales. Investors will look for device upgrades when the company launches its 5G enabled device in 2020.
According to an Apple Insider report, investment firm Cowen expects production in the September quarter to be 47 million units—a fall of 2% year-over-year. However, the estimate is higher than the earlier forecast of 44 units.
According to Cowen, strong demand for the iPhone XR drove the increased forecast. The company reduced the iPhone XR’s price by $150. Cowen expects the new lineups to account for 32 million units or 68% of Apple’s total units in the third quarter.
Will Apple stock reach record highs?
Apple is still trading marginally below its record high of $233.47. There’s a good chance that the stock will continue to rise in the upcoming months. A lot will depend on the company’s quarterly results. The results will likely be released on October 30 after the market closes.
Analysts expect the company’s sales to fall 2.5% to $258.83 billion in fiscal 2019—a 0.2% decline in Apple’s September sales, which are estimated at $62.77 billion.
The company will return to revenue growth in 2020. Analysts expect the sales to rise 4.5% to $270.55 billion next fiscal year. The sales growth will likely accelerate to 6.3% in 2021.
Analysts have a 12-month average target price of $227.47, which is close to the current price. On Monday, J.P. Morgan increased its target price on Apple from $243 to $265. Cowen has a target price of $250, according to the Apple Insider report.
Analysts will likely revise the target estimates after the company releases its quarterly results.
At the time of this writing, Apple was trading at $227.05. Based on that price, the stock was trading as follows:
- 12.2% above its 100-day moving average of $202.31
- 7.5% above its 50-day moving average of $211.19
- 3.7% above its 20-day moving average of $219.04
MACD and RSI
Apple’s 14-day MACD (moving average convergence divergence) is 2.38. A stock’s MACD is the difference between its short-term and long-term moving averages. Apple’s positive MACD score indicates an upward trading trend.
The stock has a 14-day RSI (relative strength index) score of 86, which shows that the stock is trading in overbought territory. An RSI score above 70 indicates that a stock has been overbought, while an RSI score below 30 indicates that a stock has been oversold.
A solid holiday quarter for Apple will continue to increase investors’ optimism. Among the 38 analysts tracking the stock, 87% recommend a “buy,” 13% recommend a “hold,” and none recommend a “sell.”