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Category: Stock Market and Apple
Date: 17 February 2020 Stock Price: $317.86 We take a look at the investor update release by Apple in which it said it will miss its earnings guidance supplied with their 1st quarter 2020 earnings report due to the impact of the Coronavirus on their sales and production of their devices.
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About Apple
Apple is one of the worlds biggest smart phone and related accessories makers with the group manufacturing the iPhone, iPad, Macbook (laptops for those that don't know), Apple Watch and other related products and services. The group is starting to focus more and more on their services offering such as cloud services for their device users and services such as iTunes.
Apple iPhone 11
Apple Investor Update
Cupertino, California — February 17, 2020 — As the public health response to COVID-19 continues, our thoughts remain with the communities and individuals most deeply affected by the disease, and with those working around the clock to contain its spread and to treat the ill. Apple is more than doubling our previously announced donation to support this historic public health effort.
Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.
The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.
The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.
Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations. The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority — now and always — is the health and safety of our employees, supply chain partners, customers and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.
Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.
The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.
The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.
Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations. The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority — now and always — is the health and safety of our employees, supply chain partners, customers and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.
Apple (NYSE:AAPL) stock price history
The image below obtained from Google, shows the stock price history of Apple (NASDAQ: APPL) for the last 5 years. And its been a very good time for Apple shareholders. 5 years ago the stock of Apple was trading at around $129.50 a stock and its currently trading at $317.86 a stock. That's a very healthy 145.8% return provided to Apple stockholders over the last 5 years.
The stock of Apple is trading at a lot closer to its 52 week high of $327.85 than it is to its 52 week low of $169.49 a stock, which to us is a clear indication that the short term sentiment and momentum of Apple stock is very positive at this point in time,
The stock of Apple is trading at a lot closer to its 52 week high of $327.85 than it is to its 52 week low of $169.49 a stock, which to us is a clear indication that the short term sentiment and momentum of Apple stock is very positive at this point in time,
Apple ( NASDAQ:AAPL) stock price history over the last 5 years
Recent coverage of Apple
The extract below discusses the latest regarding Apple as obtained from TheStreet.com
Stocks fell after Apple issued a revenue warning because of the coronavirus outbreak in China.
Stocks fell Tuesday after Apple (AAPL) issued a revenue warning because of the coronavirus outbreak in China.
The Dow Jones Industrial Average declined 117 points, or 0.4%, to 29,280, the S&P 500 fell 0.19% and the Nasdaq was down 0.09%. The S&P 500 and Nasdaq closed at record highs on Friday. Stock markets in the U.S. were closed Monday for Presidents Day. Governments in Asia have taken measures to prop up economic growth amid the outbreak, but Apple's outlook served as a warning those measures might not be enough.
With the death toll from the virus rising to 1,875 and confirmed cases jumping to 73,337, China moved to postpone its biannual auto show, one of the industry’s biggest international events, and could postpone its annual congress, the biggest political meeting of the year. The standing committee for the National People’s Congress will meet Feb. 24 to deliberate postponing the meeting that is set to begin March 5, according to the Associated Press. Apple said it wouldn't meet previous guidance for its fiscal second quarter because of the coronavirus outbreak in China, and noted that iPhone shortages would affect its near-term sales.
Read the full article here
Stocks fell after Apple issued a revenue warning because of the coronavirus outbreak in China.
- Apple is Real Money's Stock of the Day following the tech giant's warning.
- Coronavirus update: Deaths 1,875; confirmed cases 73,337
Stocks fell Tuesday after Apple (AAPL) issued a revenue warning because of the coronavirus outbreak in China.
The Dow Jones Industrial Average declined 117 points, or 0.4%, to 29,280, the S&P 500 fell 0.19% and the Nasdaq was down 0.09%. The S&P 500 and Nasdaq closed at record highs on Friday. Stock markets in the U.S. were closed Monday for Presidents Day. Governments in Asia have taken measures to prop up economic growth amid the outbreak, but Apple's outlook served as a warning those measures might not be enough.
With the death toll from the virus rising to 1,875 and confirmed cases jumping to 73,337, China moved to postpone its biannual auto show, one of the industry’s biggest international events, and could postpone its annual congress, the biggest political meeting of the year. The standing committee for the National People’s Congress will meet Feb. 24 to deliberate postponing the meeting that is set to begin March 5, according to the Associated Press. Apple said it wouldn't meet previous guidance for its fiscal second quarter because of the coronavirus outbreak in China, and noted that iPhone shortages would affect its near-term sales.
Read the full article here
Apple iStore
Apple (NASDAQ:AAPL) stock valuation as at 29 January 2020
So what do we value Apple's stock at after the release of their 4th quarter 2019 earnings and their guidance provided for 2020. Based on their latest earnings report our valuation model provides a target (full value) price of Apple at $255.70 a stock (up significantly from our 4th quarter 2019 earnings report valuation of Apple). We therefore believe that the stock of Apple is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $255.70. Therefore we believe a good entry point into Apple stock is at $230 or below. We expect the stock of Apple to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
Since the stock of Apple is trading at well above our target (full value) price and our suggested entry price we will go against most market commentators and rate Apple as a sell
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $255.70. Therefore we believe a good entry point into Apple stock is at $230 or below. We expect the stock of Apple to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
Since the stock of Apple is trading at well above our target (full value) price and our suggested entry price we will go against most market commentators and rate Apple as a sell
Next earnings release of Apple
It is expected that Apple will publish their Q2, 2020 earnings report in late April 2020