An analyst sees good growth prospects for Apple Inc. (AAPL)

Apple Inc. (NASDAQ: AAPL) stock fell -2.03% on Friday to $153.72 against a previous-day closing price of $156.90. With 100.78 million shares changed hands, the volume of the stock remained heavier than its average volume of 74.99 million shares. During the session, the Consumer Electronics company that operates in wider Technology sector, reached to the highest price of $158.74 whereas the lowest price it dropped to was $153.67. The 52-week range on AAPL shows that it touched its highest point at $182.94 and its lowest point at $129.04 during that stretch. It currently has a 1-year price target of $181.89. With its current market cap of 2497.77 billion, AAPL has annualized dividend of $0.92 while the current yield stands at 0.60%. Beta for the stock currently stands at 1.25.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AAPL was down-trending over the past week, with a drop of -1.02%, but this was down by -8.27% over a month. Three-month performance surged to 13.57% while six-month performance fell -8.94%. The stock gained 7.17% in the past year, while it has lost -13.43% so far this year. A look at the trailing 12-month EPS for AAPL yields 6.05 with Next year EPS estimates of 6.44. For the next quarter, that number is 1.26. This implies an EPS growth rate of 71.40% for this year and 5.57% for next year. EPS is expected to grow by 9.48% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 22.00%.

Float and Shares Shorts:

At present, 16.16 billion AAPL shares are outstanding with a float of 16.06 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 104.99 million, which was 0.65% higher than short shares on Jun 14, 2022. In addition to Mr. Timothy D. Cook as the firm’s CEO & Director, Mr. Luca Maestri serves as its CFO & Sr. VP.

Institutional Ownership:

Through their ownership of 60.08% of AAPL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 30.39% of AAPL, in contrast to 29.30% held by mutual funds. Shares owned by individuals account for 0.34%. As the largest shareholder in AAPL with 7.55% of the stake, The Vanguard Group, Inc. holds 1,213,535,914 shares worth 1,213,535,914. A second-largest stockholder of AAPL, Berkshire Hathaway, Inc., holds 894,802,319 shares, controlling over 5.57% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in AAPL, holding 677,925,587 shares or 4.22% stake. With a 2.83% stake in AAPL, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 455,248,459 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.13% of AAPL stock, is the second-largest Mutual Fund holder. It holds 343,149,759 shares valued at 53.95 billion. Fidelity 500 Index Fund holds 1.03% of the stake in AAPL, owning 165,097,103 shares worth 25.96 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AAPL since 41 analysts follow the stock currently. There are 26 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 6 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AAPL analysts setting a high price target of $220.00 and a low target of $122.00, the average target price over the next 12 months is $182.62. Based on these targets, AAPL could surge 43.12% to reach the target high and fall by -20.63% to reach the target low. Reaching the average price target will result in a growth of 18.8% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AAPL will report FY 2022 earnings on 11/03/2022. Analysts have provided yearly estimates in a range of $6.29 being high and $5.96 being low. For AAPL, this leads to a yearly average estimate of $6.09. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Apple Inc. surprised analysts by $0.04 when it reported $1.20 EPS against a consensus estimate of $1.16. The surprise factor in the prior quarter was $0.10. Based on analyst estimates, the high estimate for the next quarter is $1.35 and the low estimate is $1.13. The average estimate for the next quarter is thus $1.26.

Dividends & Yield:

In terms of dividends, AAPL has a current ratio of $0.92, which is $0.92 over the trailing 12-months, while a dividend of $0.79 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and AAPL currently yields $0.59. In the past year, AAPL’s dividend yield has been $0.59, but when looking at the stock over the past five years, its yield has been $1.04. Accordingly, AAPL has a current buyback yield of $3.38. This was $3.38 for the TTM, and it was $4.86 for the past five years.

Summary of Insider Activity:

Insiders traded AAPL stock several times over the past three months with 1 Buys and 12 Sells. In these transactions, 31,896 shares were bought while 250,366 shares were sold. The number of buy transactions has increased to 21 while that of sell transactions has risen to 46 over the past year. The total number of shares bought during that period was 1,977,889 while 1,910,891 shares were sold.

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