MORGAN STANLEY: Apple's Next Earnings Announcement Could Present A Great Buying Opportunity
Beck Diefenbach, Reuters
The stock has lost nearly 40 percent of its value since topping out at $705.07 in September, and many investors continue to struggle with where it goes next.
According to Morgan Stanley analyst Katy Huberty, those hoping for an Apple earnings rebound in the second quarter of 2013 are likely to be disappointed, and shares may even head lower after Apple announces its first quarter earnings later this month, as she expects weaker forward guidance from management than the market currently expects.
If that sparks a further sell-off in Apple, though, then Huberty is a buyer.
In a note to clients this morning, she writes:
March quarter gross margin and June quarter EPS guide the most important metrics in C1Q, potentially helping build confidence around Apple’s ability to hold gross margin while introducing lower priced products. iPhone and iPad units are less relevant this quarter, in our view, given likely inventory adjustments and delays ahead of product launches in September.
What to do with the stock and upcoming catalysts: We see potential near-term share price weakness on a lower than expected June quarter EPS guide. But, we are buyers ahead of June into the following catalysts: 1) Preview of iOS 7 at WWDC in June which could highlight a new “killer app” such as mobile wallet, 2) A lighter 9.8-inch iPad and new iPad Mini in September quarter, 3) New iPhone 5S and lower-priced iPhone launch in September.
Whether or not Apple can deliver on product launches later this year that will find favor with investors is an open question, but if Huberty is right, the stock could finally start to see a turnaround in the next few months.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas
- IndiGo places order for 30 wide-body A350-900 planes