Behind Apple’s U-shaped recovery

From Rich Smith’s “Why Apple Stock Floated Higher Today” posted Tuesday afternoon on The Motley Fool:

Joining the rest of the stock market in bouncing, Apple (NASDAQ:AAPL) shares defied gravity today and levitated a solid 3% through 1:25 p.m. EDT.

Helping the tech giant recover from yesterday’s selling was a positive analyst note from investment banker UBS.

One day after analysts at Deutsche Bank said that they see “strong momentum across all of [Apple’s] businesses,” and investment bank Bernstein predicted a modest beat by Apple in its upcoming third fiscal quarter of 2021, UBS chimed in today with a reiterated buy rating of its own.

“Based on strength in iPhones in what is typically a seasonally slower quarter and better Mac sales despite supply chain headwinds,” StreetInsider.com reported, UBS said it was raising its third-quarter 2021 revenue and EPS estimates to $74.7 billion and $1.01, respectively, from $71.3 billion and $0.95.

So, are $74.7 billion in sales and $1.01 EPS good or bad?

My take: Those estimates, unlike the children of Lake Wobegon, are below average. I’ve asked to see both notes.

3 Comments

  1. Gregg Thurman said:
    If weak estimates like those can propel AAPL up 3%, then results announced next Wednesday should please the longs very much.

    Personally, I think today’s results are a recovery from Friday and Mondays’s sell off. AAPL volatility these past several are out of historic character, but as long as AAPL continues to go up I’ll take it.

    2
    July 20, 2021
  2. Fred Stein said:
    Notice how the market ignored the 5 alarm fire. Fifteen minutes of OMG AAPL fame.

    Also, trench warfare at $142 yesterday. The defense held the line.

    1
    July 20, 2021
  3. Jerry Doyle said:
    I long have trumpeted on this forum (along with others) how Apple is firing on all cylinders. Only now are WS analysts, the news media and the financial investment banking industry seeing what Apple 3.0 followers have known all along: strong momentum across all Apple’s businesses! Still, that community views Apple with cataract eyes, a-washed in opaque lens. All of them, including our beloved & esteemed Katy Huberty, keep humping hard to run with Apple’s burnished performances. That community always arrives late, inspects the results, go wow, but walks away believing this level of performance is not repeatable.

    Will this 3Q make a different impression? I do not know. What I do know, at some point during this year that community most likely will have an epiphany recognizing poignantly Apple’s performances are real & are going to get better in the future. When they do have that epiphany, we get a new valuation labeled to Apple. 🙂

    1
    July 20, 2021

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