Apple Stock Forecast 2023: AAPL Falls 3% after missing earning estimates

Apple Stock Forecast 2023: AAPL Falls 3% after missing earning estimates

Apple Stock Price Forecast 2023: AAPL Missed earning estimates. 12 Month forecast revised lower to $152

How High Will Apple Go In 2023? AAPL is currently trading 20% lower than its 52-week high. Read on for info.

Latest Apple Stock Price

AAPL Stock Performance Chart

  • 1 Month: (+20.6%), Outperformer*
  • 6 Months: (-9.2%), Underperformer
  • 12 Months: (-12.8%), Parity

*Vs Samsung

AAPL Results Update

  • First Profit miss since 2016
  • EPS: $1.88 vs. $1.94 estimated, down 10.9% year over year
  • Revenue: $117 B vs. $121 B estimated, down 5.49% year over year
  • iPad revenue: $9.4 billion, up 29.66% year over year
  • Services revenue: $20.77 billion up 6.4% year over year
  • Gross margin: 42.96% vs. 42.95% estimated
  • Apple Forecasts further revenue declines in January-March 2023
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Apple Stock Forecast for the next 12 months

Overall Average$152
Lynx Equity$110
Credit Suisse$184
Deutsche Bank$160
JP Morgan$180

Apple Stock Prediction for the next 5 Years

Apple Stock Price Prediction 2023 is $198

Apple Stock Price Prediction 2024 is $235

Apple Stock Price Prediction 2025 is $279

Apple Stock Price Prediction 2026 is $320

Apple Stock Price Prediction 2027 is $359

Tesla Stock Forecast 2023

AAPL Stock Forecast 2023: Latest News

KCS Wealth Advisory Increases its Stake in Apple Inc.: The latest 13F filing by KCS Wealth Advisory with the SEC show that it has increased its shares of Apple Inc. by 1.1% during the 3rd quarter. KCS added 1,926 additional shares during the period. Now KCS owns 180,202 shares of Apple Inc. Apple comprises about 11.5% of KCS Wealth Advisory’s portfolio.

Apple CEO to receive 40% pay cut after shareholder vote: Tim Cook will receive a pay cut in 2023 to $49 million in total compensation. In 2022, Cook made just under $83 million in stock awards, $12 million in incentives, and $3 million in salary.

Apple Remains the Best FAANG Stock of 2023: AAPL is down around a quarter this year and from being the world’s largest company with a market cap of over $3 trillion, AAPL is now valued at $2.2 Trillion. However, among the FAANG stocks, AAPL remains to be the best performing.

Apple Fined 1 Million Euros By Paris Court: Apple was slapped a fine of 1 Million Euros by the Paris court over the company’s App Store. The court found that Apple has imposed clauses on French app developers which constituted abuse under that country’s law.

Apple Plans to Enable External Apps installation: Apple is planning to enable app installation on its Apple devices from external sources. The changes are being made in response to the European Union’s Digital Markets Act, which requires tech companies to fully comply with restrictions by 2024. This will be the first time Apple will be allowing rival apps on Apple devices.

APPLE Delays the Launch of Fully Automated EV: Apple was slated to launch its self-driving EV as early as 2025. However, as per the latest news, Apple is unlikely to deliver the EV by the estimated date.

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.

Can apple stock reach $1000?

Apple Stock Price Forecast: 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. 

Meta Stock Forecast 2023

Apple Stock Forecast 2023: 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.

Amazon Stock Forecast 2023

Apple Stock Price 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.

NVDA Stock Forecast 2023

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.

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