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Apple’s Q3 Earnings Call: Can Tim Cook’s Commentary Turn The Market?

Investors eagerly await Apple's fiscal year Q3 results and management commentary on the earnings call.

Shares of Apple, Inc. (NASDAQ:AAPL) were modestly lower in premarket trading on Thursday, inspired by the broader market negativity.

When Cook Talks, Everyone Listens: Cupertino’s fiscal year third-quarter results due after the market close and the management commentary on the earnings call have the potential to turn fortunes around, both for the stock and the broader market.

Shares of Apple, Inc. were modestly lower in premarket trading on Thursday, inspired by the broader market negativity. CFOTO/GETTY IMAGES  

Wedbush analyst Daniel Ives said in a Wednesday note, “The entire Street will be laser-focused on Apple’s quarter as when Cook talks everyone else listens given Apple’s unique perch and perspective around consumer demand globally.”

The statement cannot be ignored as a hyperbole. Apple does its business globally. Given Apple’s consumer-focused products such as the iPhone, iPad and Mac devices, the company’s performance could be considered a litmus test for the health of consumers, who fuel much of the economic activity.

More importantly, Apple is the heaviest-weighted stock in both the S&P 500 Index and the Nasdaq Composite Index, with weightings of 7.7% and 11.6%, respectively. The stock, therefore, has the potential to take these indices in the direction it goes.

China – Vital Cog: Most analysts model an in-line to slightly-better June quarter, premised on brisk iPhone upgrade activity, especially in the key China activity. 

Ives said, “We believe iPhone units based on a clear uptick in demand around the key China region this quarter could show some upside.” This is despite the choppy macro environment, he pointed out.

Morgan Stanley’s Erik Woodring said he would focus on revenue growth in the U.S. versus internationally, with an eye on China.

Among the other metrics, the analyst would be watching for are total revenue, Services revenue growth and gross margin. The analyst expects these three metrics to come in at $81.3 billion, 8.8% and 44.3%, respectively.

The Outlook: Ives shoots for conservative guidance for the September quarter. He sees it as “all about the drumroll to the main event with the anniversary iPhone 15 launch slated for the mid-September timeframe.”

Woodring also said he expects soft guidance, although expecting year-over-year growth, and an acceleration in Service revenue growth.

Apple Stock: After a dismal 2022, Apple stock has acquitted itself credibly. The shares of the most valued global company are up about 49% year-to-date.

JPMorgan’s Samik Chatterjee on Wednesday established a 2024 price target of $220 for the stock.

In premarket trading, the stock was down 0.39% at $191.83, according to the Zenger News Pro data.

Produced in association with Benzinga

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