Why Apple Dipped More Than Broader Market Friday

Apple (AAPL) closed the most recent trading day at $207.49, moving -1.04% from the previous trading session. This change lagged the S&P 500's 0.16% loss on the day. On the other hand, the Dow registered a gain of 0.04%, and the technology-centric Nasdaq decreased by 0.18%.

The maker of iPhones, iPads and other products's shares have seen an increase of 12.2% over the last month, surpassing the Computer and Technology sector's gain of 6.77% and the S&P 500's gain of 3.15%.

The investment community will be closely monitoring the performance of Apple in its forthcoming earnings report. The company is forecasted to report an EPS of $1.33, showcasing a 5.56% upward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $83.07 billion, up 1.55% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.58 per share and a revenue of $384.68 billion, representing changes of +7.34% and +0.36%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Apple. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.17% rise in the Zacks Consensus EPS estimate. At present, Apple boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Apple is presently trading at a Forward P/E ratio of 31.85. This valuation marks a premium compared to its industry's average Forward P/E of 12.3.

Also, we should mention that AAPL has a PEG ratio of 2.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers industry currently had an average PEG ratio of 2.31 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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