Zacks: Apple poised to beat

From "Why Apple (AAPL) is Poised to Beat Earnings Estimates Again" posted Monday by Zacks:

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Apple (AAPL), which belongs to the Zacks Computer - Mini computers industry.

This maker of iPhones, iPads and other products has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 3.82%.

For the last reported quarter, Apple came out with earnings of $1.29 per share versus the Zacks Consensus Estimate of $1.26 per share, representing a surprise of 2.38%. For the previous quarter, the company was expected to post earnings of $1.14 per share and it actually produced earnings of $1.20 per share, delivering a surprise of 5.26%...

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Apple has an Earnings ESP of +4.42% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.

My take: Two quarters doesn't seem like enough to declare a trend. Especially with a company like Apple, whose history of beating estimates goes back decades.

7 Comments

  1. Paul Campbell said:
    The Earnings Whisper page for AAPL gives the following guesstimate for a small beat: $1.96 vs. consensus of $1.93. And it gives estimated revenue of $122.05B.

    So that $1.96 would be down about 7% YOY from $2.10 last year.

    0
    January 24, 2023
  2. Gregg Thurman said:
    This quarter’s pre-earnings run up has been nice. But with all the black swans standing in the way of a breakout, what could be the driver of the run up magnitude AAPL just experienced?

    Could it be that WS and the institutions are seeing the end of the Russo/Ukraine conflict, the end of inflation and the Fed’s late response, and a lessening in the fears of recession, creating a better buy now before it’s too late mentality? Today’s pull back (pre-market) could be nothing more than those run up buyers have gotten their fill, and returned to the sidelines to watch events play out.

    1
    January 24, 2023
    • Gregg Thurman said:
      AAPL continues to shine, as the feast continues, at least in the short time since the open, while the US’s 3 major markets are down. World markets have returned to a more “normal” pattern of some up and some down.

      0
      January 24, 2023
    • David Emery said:
      If “WS and the institutions are seeing the end of the Russo/Ukraine conflict,” that would be consistent with “WS and the institutions” inability to judge Apple. It’s clear this summer will be bloody in Ukraine, and without a MAJOR change in the situation on the ground, Putin is very likely to continue the war into 2024 (throwing more poorly trained troops using obsolete equipment into the mix.)

      1
      January 24, 2023
  3. Daniel Epstein said:
    If Apple reports good earnings after all the bad news coming out during the quarter I would be bowing my head to the whole Apple team. While I usually do trust them to outperform under normal circumstances I can’t calculate how they would have done this in this environment. Of course all the doom and gloom that circles around Apple is usually overdone but it was very hard to argue that there weren’t problems on some key product deliveries. Let’s hope Zack’s is right.

    3
    January 24, 2023
  4. Greg Lippert said:
    There was an exodus of the big boys on the way down now they are reloading.

    Selling high, buying low….

    1
    January 24, 2023

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