REUTERS / Soe Zeya Tun
- Apple will release results for the first quarter on Tuesday afternoon. It is one of the most anticipated reports in years.
- The strategists point out that despite the recent volatility and some uncertainty surrounding the forthcoming report, no particularly large movements are expected.
- Apple shares fell 33% since their October high of $ 233.47.
- See how Apple watches the trade live.
Apple shareholders are preparing for one of the company's most important earnings reports, which will be closing on Tuesday in the following years.
The stock has fallen sharply from its recent highs, making its valuation more attractive, according to some Wall Street analysts. Others point out that the options market takes a relatively small step for the stock that responds to its report.
Tuesday's report appears four weeks after the tech giant warned that quarterly sales would be about 7% lower than previously anticipated sales, citing weak iPhone sales "mainly" in China. The rare announcement led to a refrain of price cuts by Wall Street analysts and growing fears of a further economic slowdown.
Read More: Four Crucial Issues Still to Be Addressed by Apple's Critical Results Report for Years
Following a minus of 33% from its peak in October, Apple is currently trading only 1
"We know that 2019 is a difficult year comparable," Gibbs wrote Monday in an email. "It has expected nearly unchanged EPS growth in 2019 and revenues are declining slightly, with Apple ultimately having to be superior in the end result so we can be confident that the 12% expected growth in 2020 can be achieved.
"hard year for most of the tech industry. 2019 expects EPS growth of 1.5% for S & P 500 Technology Hardware & Equipment. Therefore, Apple is not far away from its competitors. "
In the past, Apple's valuation has stabilized between 10x and 11x the forward gain – even in 2016, when the outlook was particularly gloomy and the profit was experiencing a" significant decline. "Gibbs said.
Prior to the report, Apple remains a "good barometer to gauge investor sentiment across the market," said JJ Kinahan, chief market strategist for TD Ameritrade.
The 19459013 The widespread name strongly influences indices and exchange-traded funds, he said Monday in an email to Business Insider – so the earnings results "not only have financial implications but also a psychological one To have affection for them. "  "Given the other reports we see in Asia, this is one of the situations where more strangers could come into the future, which means that AAPL investors may take greater risks," he wrote. "Investors Must Conclude This in Con Creating Their Investment Thesis for AAPL."
So far, Apple is among the top stocks bought by TD Ameritrade's retail investors. This is in stark contrast to last year's activities when it was one of the top names that customers sold. Nevertheless, Apple was the top position of its private investors last year.
Read More: The worst could be over for Apple's iPhone slump, predicts Ming-Chi Kuo
Despite the stock's volatility in recent months – and in particular the dramatic response At the beginning of this month, when Apple announced its revenue announcement, the options market does not mean that the stock is experiencing excessive profits.
The market is calculating in both directions by about 5%, said Chris Jacobson, Senior Derivative Strategist at Susquehanna. This is essentially equivalent to the realized average of 4.4% over Apple's last eight quarterly reports.
"Even with the pre-release and sale of ~ 10% in the shares on this announcement, the options market continues to forecast a notable short-term volatility that reflects the ongoing uncertainty of investors," said Jacobson.
In a separate note to Monday's subscribers, Susquehanna's derivatives strategist said investors generally bet that technology stocks could be expected to make particularly large moves this week.
The Team Highlighted How Investors Are Trading Invesco's exchange-traded QQQ fund traces the development of the tech-heavy Nasdaq 100 index.
"In Invesco QQQ Trust, we have seen a trend of tail buying in recent days." Investors believe there might be notable surprises in both directions, "she wrote, adding that nearly half of the fund's holdings , including Apple, Amazon and Facebook, this quarter posted quarterly gains.