Apple’s Week: Store Closures Trip The Stock
It was shaping up to be an amazing week for Apple once again. That is, until the very last few hours.
Why Apple stock price increased
By the end of the Thursday trading session, Apple stock had gained another 4% for the week against the S&P 500’s 2.5%. Shares kept pushing for all time highs.
Helping to propel prices was yet another round of “sell-side love”. Last week, I listed the major Wall Street firms that had either upgraded the stock or raised the price target over the previous two weeks: Morgan Stanley, Credit Suisse, Wedbush, Bank of America, HSBC and Wells Fargo. The bull theses revolved around the 5G supercycle, a smartphone recovery in China, margin benefit from a robust service business and lower risk of government regulation.
This time, Citi, RBC and Jefferies weighed in, all of them looking very optimistic. 5G was yet again a common theme. Other reasons cited for bullishness included strength in wearables and services, as well as upside from share buybacks. I spoke at length about this last subject on Wednesday – check out the discussion.
Why Apple stock price dropped
But Friday was a tougher day for Apple and the markets in general – driven, in great part, by Apple itself. It was reported that he Cupertino company would close some of its stores in the US because of the resurgence of COVID-19 cases. A wobbly recovery in equities was easily tripped by concerns over the impact of the next stage in the global pandemic.
On behalf of Apple buy-and-hold investors, I am not too concerned about the store closures for the moment. Of course, I don’t see them as good news either. But the company operated fairly well in the first quarter with even more limited physical presence around the world. Remember that the digital channel is still up and running, and that services tend to be a beneficiary of the stay-at-home economy.
Still, Apple finished the week well in the green, beating the S&P 500 by almost two percentage points but trailing the performance of the rest of the FAAMG group. The company’s valuation remains above the $1.5 trillion mark.
The table below summarizes Apple’s stock returns over different periods, compared to the performance of its sector and the broad market. Apple stock has handily outperformed the S&P 500 and the industry across the board over virtually any stretch of time: from five days to five years. Talk about momentum!
All the numbers, tables and graphs in this article have been provided by Stock Rover, my favorite source for data and insights on stocks, ETFs and markets. Check out the platform and sign up for as little as $7.99 per month.
(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)