Previewing Apple’s Week: Approaching Catalysts
Apple stock reached new heights, but it has plateaued over the past five trading days at around $500 apiece. What should we expect of the company and the stock over the upcoming week?
Below is a quick preview on Apple for the next five trading days.
What to keep an eye on
- Split, at last: finally, one Apple share worth about $500 this Friday will become four shares worth roughly $125 each next week. Although I am skeptical, it will be interesting to see if demand from smaller retail investors who can now afford to buy full shares of Apple (the company’s original intent behind the split) will drive the stock price higher still.
- New products around the corner: this coming week, it is very likely that Apple will announce the date of its September product and service refresh. The event will be the end of the anticipation over the 5G “super cycle”, as the iPhone 12 with 5G capabilities is expected to be unveiled within the next couple of weeks. I do not necessarily believe that the “save the date” will move the stock much, but the conversations in the media will likely shift to Apple’s new offerings, which should also include the Apple Watch Series 6 and maybe the bundling of services.
- Sell side still behind: I have explained a few times that Wall Street bulls have been on a race to catch up with Apple’s stock price – what I usually refer to as “sell side love”. Even though the more vocal bulls from Morgan Stanley and Wedbush have already weighed in and bumped their price targets recently, there is probably more to come ahead of Apple’s September product refresh. Apple has a consensus rating of “buy” among analysts, but the average price target is still a sizable 18% below the actual price (see graph below) – an inconsistency that has been fixed lately, but only slowly, through further price target increases.
- Quick question: will Apple shares hang on to their pre-split price level of $500? Or will investors trim their positions as I have suggested would be prudent and push the price lower?
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