Apple Stock FY2024 Q2 Third-party Analysts' Forecast & Preview

According to Motley Fool, Apple's stock performance in 2024 has been mixed so far. The stock had a strong year in 2023, climbing 48%. However, in 2024, the stock has underperformed, down about 11% year-to-date.

The main reason cited for the recent stock decline is worries over slowing iPhone sales in China. A report from Counterpoint Research showed that iPhone sales in China fell 24% year-over-year in the first six weeks of 2024. This has been weighing on the stock price.

Despite the weakness in China, Motley Fool notes that Apple still delivered solid earnings growth in the previous quarter, with earnings per share growing 16% year-over-year. This growth was largely driven by the company's strong performance in its higher-margin services category, as well as ongoing share repurchases.

The analyst from Bank of America Securities, Wamsi Mohan, believes Apple has an effective strategy to counter the softness in China. The company is able to lower prices of its older iPhone models to maintain steady demand. Additionally, Apple's long-term trend of shifting customers towards higher-value units can help offset weak sales in China, which accounted for 21% of the company's operating profit in the previous quarter.

While the stock's recent decline has brought its price-to-earnings ratio down to a more reasonable level of 27, compared to the high of 32 at the end of 2023, the analyst still sees significant upside potential. The Bank of America Securities analyst has maintained a $225 price target on the stock, which represents a potential upside of about 31% over the current share price of $171.

Part 2: Apple FY2024 Q1 Earnings Report Recap

1. Apple Key Indicators and Historical Earnings Report

• - Apple FY2024 Q1 EPS was $2.18, YOY +15.96%
• - Apple PE Ratio today is 27.63 
• - Apple FY2024 Q1 Revenue was $119.6B, YOY +2.07% 
• - Apple FY2024 Q1 FCF was $37.5B, YOY +24.11%
• - Apple FY2024 Q1 Current Ratio was 1.07, YOY +14.34% 
• - Apple FY2024 Q1 ROA was 9.61%, YOY +12.00%
• - Apple FY2024 Q1 ROE was 49.79%, YOY -10.88%
• - Apple FY2024 Q1 Gross Margin was 45.87%, YOY +6.78% 
• - Apple FY2024 Q1 Net Margin was 28.36%, YOY +10.77%

For more information, such as definitions and explanations of the above technical terms, please view: Interpretation of Key Indicators >>

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2. Apple FY2024 Q1 Financial Statement Analysis

Net Sales

● Apple's total net sales for the three months ended December 30, 2023 were $119,575 million, up from $117,154 million in the same period the previous year.
● The increase in net sales was driven by growth in the Services segment, which grew from $20,766 million to $23,117 million, an 11.3% increase.
● Product net sales remained relatively flat, growing from $96,388 million to $96,458 million, a 0.1% increase.

Gross Margin

● Apple's gross margin increased from $50,332 million in the three months ended December 31, 2022, to $54,855 million in the three months ended December 30, 2023, a 9.0% increase.
● This improvement in gross margin was driven by a decrease in total cost of sales, which fell from $66,822 million to $64,720 million, a 3.1% decrease.

Operating Expenses
● Apple's total operating expenses increased slightly from $14,316 million in the three months ended December 31, 2022, to $14,482 million in the three months ended December 30, 2023, a 1.2% increase.
● This was primarily due to an increase in Selling, general and administrative expenses, which grew from $6,607 million to $6,786 million, a 2.7% increase.
● Research and development expenses remained relatively flat, decreasing slightly from $7,709 million to $7,696 million, a 0.2% decrease.

Net Income

● Apple's net income increased from $29,998 million in the three months ended December 31, 2022, to $33,916 million in the three months ended December 30, 2023, a 13.1% increase.
● This increase in net income was driven by the growth in gross margin and the relatively stable operating expenses.

Balance Sheet

● Apple's total assets increased from $352,583 million as of September 30, 2023, to $353,514 million as of December 30, 2023, a 0.3% increase.
● The company's total liabilities decreased from $290,437 million as of September 30, 2023, to $279,414 million as of December 30, 2023, a 3.8% decrease.
● Shareholders' equity increased from $62,146 million as of September 30, 2023, to $74,100 million as of December 30, 2023, a 19.2% increase.

Cash Flows
● Apple generated $39,895 million in cash from operating activities in the three months ended December 30, 2023, up from $34,005 million in the same period the previous year, a 17.3% increase.
● The company used $30,585 million in financing activities, primarily for repurchases of common stock and dividend payments.
● Apple's cash, cash equivalents, and restricted cash increased from $24,977 million as of December 31, 2022, to $41,974 million as of December 30, 2023, a 68.0% increase.

Overall, Apple's financial performance in the three months ended December 30, 2023, showed strong growth in net sales, gross margin, and net income, as well as a strengthened balance sheet and improved cash flow generation.

3. Apple FY2024 Q1 Business Data

Looking at net sales by reportable segment:

● Americas were $50,430 million in Q1 FY24, compared to $49,278 million in Q1 FY23, an increase of 2.3%.
● Europe were $30,397 million in Q1 FY24, compared to $27,681 million in Q1 FY23, an increase of 9.8%.
● Greater China were $20,819 million in Q1 FY24, compared to $23,905 million in Q1 FY23, a decrease of 12.9%.
● Japan were $7,767 million in Q1 FY24, compared to $6,755 million in Q1 FY23, an increase of 15.0%.
● Rest of Asia Pacific were $10,162 million in Q1 FY24, compared to $9,535 million in Q1 FY23, an increase of 6.6%.
● Total net sales across all regions were $119,575 million in Q1 FY24, compared to $117,154 million in Q1 FY23, an increase of 2.1%.

By product categories:

● iPhone were $69,702 million in Q1 FY24, compared to $65,775 million in Q1 FY23, an increase of 6.0%.
● Mac were $7,780 million in Q1 FY24, compared to $7,735 million in Q1 FY23, an increase of 0.6%.
● iPad were $7,023 million in Q1 FY24, compared to $9,396 million in Q1 FY23, a decrease of 25.2%.
● Wearables, Home and Accessories were $11,953 million in Q1 FY24, compared to $13,482 million in Q1 FY23, a decrease of 11.3%.
● Services were $23,117 million in Q1 FY24, compared to $20,766 million in Q1 FY23, an increase of 11.3%.

Part 3: Apple FY2024 Q2 Earnings Report Forecast & Preview

1. Apple FY2024 Q2 Forecast By Third Party Analyst Rating, April 17th

Apple earnings date is coming soon! After a thorough analysis of Apple's revenue, stock trends and financial data from the past few quarters, conducted by over 30 third-party financial analysts, AAPL Stock is rated as Moderate Buy with a forecasted stock price of $201.030 (Average) for the next 12 months.

- Third Party Analyst rating: Moderate Buy

- Apple Price Target: $201.030

- FY2024 Q2 EPS Forecast: $1.495

- FY2024 Q2 Revenue Forecast: $90.6B

- FY2024 Q2 EBIT Forecast: $27.7B

For more information on what the analyst ratings may mean, visit https://pro.benzinga.com/blog/what-do-stock-analyst-ratings-mean/ (Benzinga is not affiliated with Moomoo Technologies Inc., Moomoo Financial Inc., or its affiliates.)

2. Apple Forecast By Technical Analysis, April 17th, 2024

For more information, such as definitions and explanations of the above technical terms, please view: 

Interpretation of technical indicators >>

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