Technology giant Apple (AAPL - Free Report) is set to release first-quarter fiscal 2020 results on Jan 28 after market close. Since Apple accounts for more than 19% of total market capitalization of the entire technology sector in the S&P 500 Index, it is worth taking a look at its fundamentals ahead of its quarterly results.
Apple has been hitting record highs lately. It has returned about 28% over the past three months, on par with the industry’s gain. The momentum is expected to continue if the company beats estimates in the soon-to-be reported quarter.
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Inside Our Methodology
Apple has a Zacks Rank #2 (Buy) and an Earnings ESP of +4.08%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Apple saw positive earnings estimate revision of a couple of cents over the past 30 days for the fiscal first quarter. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator for the stock. Additionally, the company has a strong track record of positive earnings surprise. It delivered an average positive earnings surprise of 3.64% in the trailing four quarters.
Further, the Zacks Consensus Estimate indicates a modest year-over-year increase of 8.37% for earnings and 4.07% for revenues.
Apple Inc. Price, Consensus and EPS Surprise
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Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. Quote
Though AAPL has a solid Momentum Score of B, it has Value and Growth Score of D and C, respectively. The stock belongs to a top-ranked Zacks Industry (top 44%). According to the analysts polled by Zacks, more than 65% of the analysts provided a Strong Buy or a Buy rating for Apple ahead of its earnings with a price target of $302.19.
What’s Hot?
Analysts are betting on a solid holiday quarter based on strong sales of iPhone 11, Apple Watch and AirPods wireless earbuds. As such, many of them have raised their price targets on the stock ahead of its Q1 earnings.
ETFs in Focus
ETFs having the highest allocation to this tech titan will be in focus going into its earnings announcement. While there are several ETFs in the space with Apple in their top 10 holdings, we have highlighted the ones that have Apple as the top or the second firm with a double-digit allocation:
Select Sector SPDR Technology ETF (XLK - Free Report) – The fund has AUM of $28.5 billion and has a Zacks ETF Rank #1 (Strong Buy). Apple makes up for 20.1% of the assets.
MSCI Information Technology Index ETF (FTEC - Free Report) – This fund has a Zacks ETF Rank #1 and has AUM of $3.5 billion. Apple has 18.9% allocation.
Vanguard Information Technology ETF (VGT - Free Report) – It has AUM of $27.6 billion and sports a Zacks ETF Rank #1. Here, AAPL takes 18.5% share.
iShares Dow Jones US Technology ETF (IYW - Free Report) – The fund has amassed $5.1 billion in its asset base and carries a Zacks ETF Rank #1. Apple accounts for 18% of the assets.
iShares Global Tech ETF (IXN - Free Report) - The product has accumulated $3.4 billion in its asset base. Apple accounts for 16% allocation.
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