Apple Stock Forecast 2023: AAPL Set for a Bullish Run?

Apple Stock Forecast 2023: AAPL Set for a Bullish Run?

Apple Stock Forecast 2023: For the next trading day, that is Monday, the momentum of AAPL is bullish and the trade recommendation is Buy.

Apple Stock Forecast for the next 12 months is $171


Latest Apple Stock Price

 

Apple Inc Performance Chart

  • 5 Days – (+0.7%)
  • 6 Months – (-0.25%)
  • YTD – (-18.5%)
  • 1 Year – 9.9%

Apple Inc has been the darling of investors for ages. Along with having a customer base, Apple’s stock has an investor base of its own. The company’s stock has never disappointed investors, not even at the time of Covid. For instance, it has outperformed all the major indices like Nasdaq 100 and S&P 500 for years. In the last year, it has given a 4.55% return in comparison to Nasdaq 100 index has given -a 27.41% return, and the S&P 500 has given a -15.45% return (as of 30.10.2022).

With 2022, approaching its fag end, it is the right time to revisit Apple stock and decide whether to put it on the 2023 buy list or not.

Apple Stock Forecast 2023: Technical Analysis 

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Apple on its last trading day started to retreat but by the end of the day, there was a reversal leading to the minimizing of loss. AAPL is currently moving above the 50-day MA. The 50-day MA at $146.54 acted as support for AAPL and the stock price o AAPL started to gain after it tested this level on Friday.

For Monday’s trading, the first level of support for AAPL is at $146.58 and the resistance is at $151.35. AAPL has failed to breach this level of resistance level in the last few days. In case AAPL breaches this resistance level it will test the second level of resistance at $155.70.

Looking at the chart AAPL may see a reversal and start trading in Green on Monday.

Relative Strength Index

image 118

RSI for AAPL is 52.56. It is moving ahead of the resistance at 48.86. The RSI indicates a bullish run and AAPl has enough potential of rising higher before it enters the over purchased territory.

The current momentum is Bullish and our recommendation is a Buy.

Apple Stock Forecast 2023: Latest News

The company said on 6th of November that it has estimated lower iPhone 14 Pro and iPhone Pro Max shipments as COVID-19 restrictions temporarily has disrupted production at an assembly facility in Zhengzhou, China.

The downfall of Yen has forced Japanese consumers to for secondhand iPhones. The fall of their currency to a 32 year low against the dollar is now bringing an accelerated shift in spending in the Japanese economy. The rise in online auction sites have made shoppers in the country more open to secondhand product shopping right now. Apple has prevented to comment on this issue but the recent annual regulatory filing has directed to a decline in sales in Japan by 9%.

Apple Stock Forecast 2023: Factors that will Impact Apple’s Share Price in 2023

  • Valuation is all that matters- 2022 has been harsh for high-valued stocks. Various stocks like Shopify Inc (NYSE: SHOP) fell drastically due to high valuation metrics and poor earnings to fall back to. For Apple Inc, the current P/E ratio stands at 25.52. Its annual earnings per share came at $6.14 and hence the share price is trading at $153.48 (as of 31.10.2022).

Now, the P/E of 25.52 is slightly higher as compared to its peers. For example, Alphabet Inc shares are trading at a P/E of 19.38 and Meta Platforms shares are trading at a P/E of 9.45. Although both companies had a really bad quarter, if FED continues to hike the interest rates, P/E for Apple Inc can also cool off a bit.

Additionally, earning forecast for the next financial year is $6.32 per stock. Taking the cooled-off P/E of 20x, the price target for 2023 comes only at $126 or so, which is approximately 18% below the current stock price. The extent to which P/E cools off depends on the FED interest rate hike. But if Apple shares have to march towards the $180 target in 2023, then earnings should outperform the market expectations by quite some distance.

  • The Service sector is the next big thing – Whenever Apple Inc reports quarterly results, all eyes are on iPhone sales, but quite secretly, it’s their service business that is growing rapidly over the recent years. It has contributed more than 20% in revenue in the recent results and even a greater share in the overall profits. This segment supports a high gross margin and hence sponsors almost one-third of the overall income of the company.

In the recent quarter that ended September 24, 2022, the service business grew 5% YoY and its total revenue came to $19 billion out of the company’s overall revenue of $90 billion. It is a fact that macroeconomic factors weighted down growth in the service business in this quarter due to a drop in digital advertising spending and increasing foreign exchange rates. But once the economy is on the right path, there is no structural reason for the service businesses not to give double-digit growth. In fact, it will be the main driver if Apple shares have to march to $180 in 2023.

  • Growth in the hardware sector –  The hardware sector for Apple has also raised eyebrows. The company’s largest revenue segment remains the iPhone and stellar growth is not expected in this sector in the coming year. It is because the iPhone’s sales have increased over 10% YoY in the latest quarter.

However, Apple does not have great hardware products in the pipeline. Moreover, the recently launched iPhone 14 did not receive great reviews and the holiday season was expected to go muted for Apple in terms of iPhone sales. Nevertheless, Mac sales increased 25% in the latest quarter earnings, and interestingly, nearly half of the Mac buyers were new to the product.

In 2023, growth in the hardware segment is likely to remain dull and that is one big reason to be not outrightly bullish for Apple. It is expected to ride the tide of macroeconomic uncertainties, but the possibility of double-digit growth especially in the hardware segment is very bleak.


Read our analysis on Tesla Stock Forecast 2023


Apple Stock Forecast 2022: Positive Factors

  • Strong Q3 ResultsApple Inc posted excellent Q3 results
    • Revenue increased 2% YoY to $83.0 billion
    • Net sales in services up by 12%
    • Americas grew 4%, Europe grew 2%
    • iPhone sales increased 3% to $40 billion
    • Gross margin increased by 2%
  • Robust Smartphones Demand
    • The smartphone market was around $270 billion last year and is expected to grow at an annual growth rate of 7.6%
    • Apple controlled nearly 17.5% of smartphones globally in 2021, up from 16 percent in 2020.
    • This percentage further increased in the case of 5G in which Apple controls almost 28% of phones globally.
  • Regular Share Buyback Program and Excellent Dividend
    • Free cash flow for Apple in the last four quarters has crossed $100 billion and surprisingly it has rewarded its shareholders handsomely by paying $14 billion in dividends last year. Apple is announcing regular buyback programs and in turn, boosting shareholder returns by reducing the number of free-floating shares in the market. Apple had 22 billion shares in 2017 and by end of the fiscal year 2021, only 16.86 shares are left. It means that the percentage of ownership for every shareholder has increased proportionately in the last five years.
  •  Sticking to the Basics
    • While Apple is not bombarding the market with breakthrough products every couple of years and management is sticking to the basics, free cash flow is allowing it to reinvest and improve products and its services which are driving up revenues by increased sales. Apple is investing a large chunk of revenue in R&D – which stood at $23 billion in the past year and hence we can expect a path-breaking product anytime soon. 

Apple Stock Forecast 2022: Negative Factors

  • AR/VR Headsets Will Not Contribute Towards Revenue in Coming Years – While it is great news that Apple is launching AR/VR headsets based on metaverse technology as soon as the second half of 2022 or in 2023. But the real question remains whether it will contribute to revenue in the balance sheet in the coming years. The headset will be priced higher than the watch around $1000 and this will significantly reduce its sales in the initial years. It is expected to have minimal contribution in revenue at least till 2026. Also between watches and AirPods, headsets will struggle to find a place.
  •  Bad Local and Global Cues- Apple Inc is a great company with strong financials. But lately due to inflation fears in the US economy, investors have been harsh on growth stocks. With the Federal Reserve beginning to reduce the size of its balance sheet, many are forecasting a recession which in turn may reduce demand for Apple devices.

Apple Stock Forecast Today

Overall OutlookPartially Positive
1. Market's WisdomPartially Positive
1a. Market DataPartially Positive
1b. Technical RecommendationNeutral
2. Crowd's WisdomPartially Positive
2a. Social Media BuzzHigher
2b. Social Media SentimentNeutral

Apple Stock Forecast 2023: Conclusion

In conclusion, Apple is a fundamentally very strong stock. In all this discussion, an investor should not forget about the company’s share repurchase program. It bought $90 billion worth of its shares in fiscal 2022 and has spent $420 billion in the last six years. Due to share repurchase, the share count has decreased by 40% in the last decade adjusting for share splits.

It is shifting its focus to the service business from the product sector and believes that service revenue will take it to newer heights. The main strength of Apple is its loyal customer base, and hence it is sailing through macroeconomic headwinds without great products in the pipeline.

The only plausible products are AR/VR sets based on metaverse, which was expected to hit the market in 2022, but still, there is no official confirmation about the release. However, the next big thing is self-driving cars which are expected to hit the market at least by 2025.

If we take 2023 into perspective, easing supply chain pressure and cooling off inflation are the first hopes for Apple Inc so that their service business can clock double-digit growth. But growth in the hardware segment is likely to remain muted and hence the target for 2023 cannot go beyond $180. The same is suggested by the technical chart also.

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Vineet

Vineet

Vineet Agarwal is a trained technical analyst and avid stock trader. A graduate from a Top Technology Institute, Vineet carries out extensive technical and secondary research for this authored stock forecasts.

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