Shares of Apple (AAPL) are trading lower in today’s session following analyst comments that weren’t exactly what investors wanted to hear. The tech giant is set to report its fiscal fourth-quarter results on October 31, and while its long-term outlook remains solid, Morgan Stanley sees a “challenging” near-term situation due to historical patterns.
Analyst Erik Woodring expects Apple to beat expectations for both revenue and earnings in the September quarter thanks to strong late-cycle iPhone 15 sales. However, he forecasts that the company will miss guidance expectations for its December quarter due to mixed iPhone demand.
Although Woodring hasn’t heard of any iPhone production cuts, he notes that demand for the iPhone is “mixed,” and historically, iPhone production tends to be cut by 3 million units in the December quarter when demand is uncertain. As a result, with Apple trading near all-time highs at 32 times its FY25 EPS, he sees a more challenging setup heading into next week’s earnings. It’s worth noting that, so far, Woodring has enjoyed a 100% success rate on AAPL stock, with an average return of 21.42% per rating.
Investor Sentiment for AAPL Stock Is Currently Negative
Separately to Woodring’s concerns, it would seem that investment portfolios tracked by TipRanks are also becoming worried with AAPL stock, as the recent sentiment is currently very negative. Interestingly, out of the 762,028 portfolios tracked by TipRanks, 16% hold AAPL stock. However, in the last 30 days, 1.7% of those holding the stock decreased their positions.
Nevertheless, this could be the result of some portfolio rebalancing rather than bearish outlooks. In fact, the average portfolio weighting allocated towards AAPL among those who do have a position is 15.25%, which suggests that investors of the company are very confident about its future.
Is Apple a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 23 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 36% rally in its share price over the past year, the average AAPL price target of $248.34 per share implies 5.77% upside potential. In addition, analysts are expecting Apple to post earnings of $1.59 per share on $94.32 billion in revenue for the upcoming quarter.
