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Wall Street JournalApple Shares Hit All-Time High: Time to Buy?
Long-time cash-generating king Apple AAPL has been a staple in portfolios over the years, providing investors with outsized gains. And recently, the Mag 7 member hit fresh all-time highs, reflecting considerably bullish price action.
Stocks making new highs tend to make even higher highs, particularly when a company’s outlook remains positive.
Should investors tap into the momentum? Let’s take a closer look at how the tech titan stacks up.
Apple Shares Hit All-Time High
Firstly, investors should be aware the company is expected to report its next set of quarterly results on October 31st after the market’s close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Expectations for the above-mentioned release are overall flat from the end of July, but the recent downward revisions that hit the tape near the beginning of October are certainly more notable given their recency.
Modest growth is forecasted, with the current $1.54 Zacks Consensus EPS estimate suggesting a 5% climb year-over-year. Top line revisions have been slightly more positive, with forecasted sales of $94.5 billion 5.6% higher than the year-ago figure.
Image Source: Zacks Investment Research
A key item to keep an eye on during the upcoming release is the company’s Services results, which have provided a nice growth tailwind over recent years and have consistently exceeded consensus expectations in recent periods.
For the quarter to be reported, the Zacks Consensus Estimate for Services revenue stands at $25.8 billion, 15% higher than the year-ago mark and reflecting an all-time record. Investors should also expect commentary surrounding the iPhone 16 and its AI efforts as well.
Image Source: Zacks Investment Research
The valuation picture here is a bit rich, likely reflective of investors’ consistent growth expectations. The current forward 12-month earnings multiple works out to 30.5X, well above the 26.3X five-year median but beneath five-year highs of 36.1X.
And the current PEG works out to 2.4X, again above the 2.2X five-year median. The stock sports a Style Score of ‘D’ for Value. While the valuation is undoubtedly a bit steep, the company’s consistent earnings growth over the years helps provide a more positive outlook.
The current forward 12-month earnings multiple reflects a 38% premium relative to the S&P 500.
Image Source: Zacks Investment Research
And its strong cash-generating abilities have provided the flexibility to reward its shareholders nicely, currently sporting a 5% five-year annualized dividend growth rate. Shares reflect a nice opportunity for income-focused investors seeking technology exposure.
Should You Buy Apple Shares?
Apple AAPL recently saw its shares touch all-time highs, reflecting bullish momentum. Given its rock-solid fundamentals paired with consistent earnings power, the stock continues to deserve a spot in any investor’s portfolio.
The valuation picture is a bit elevated here, though it’s worth noting that the stock has historically traded at higher multiples given consistently high expectations that have largely been met.
And while the company isn’t posting the breakneck growth that it once enjoyed, Services results paired with optimism surrounding the new iPhone 16 model and AI capabilities should provide bullish tailwinds.
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Apple Inc. (AAPL): Free Stock Analysis Report