Apple Q1 earnings expected to be impacted by weak Chinese economy

By Kyle Rodda
source: shutterstock_518918716

Apple Inc. (AAPL) reports its Q1 results after Wall Street’s closing bell on February 1, 2024. We preview what to expect from the results and analyse the stock’s technicals.

Weak Chinese demand expected to weigh on Apple earnings

According to Bloomberg data, analysts forecast Apple’s earnings to grow roughly 12% in fiscal Q1 to $2.11 per share. The rise in earnings is expected to come despite flat revenue growth, with the increase owing to increased operating margins.

Weak consumer demand in China is projected to hurt Apple’s revenues, especially in its products division. Regional revenue in China is forecast to drop by 1.7%, with greater competition in that market from domestic players also impacting Apple’s topline. Services revenue is likely to drive Apple’s performance for the quarter, although a drop in fees from a year earlier risks slowing growth in that segment.

(Source: Bloomberg)

Investors will be keeping a lookout for commentary about future consumer demand – not only in China but also in the United States and other developed markets. Another issue could be supply disruptions, chip security, and the outlook for the Apple watch off the back of an ongoing patent dispute about the product’s oximeter feature.

According to Bloomberg surveys, the broker community remains relatively upbeat about the outlook for Apple shares. It retains a consensus “buy” rating, with 34 making that recommendation, 15 suggesting a “hold”, and 6 calling a sell. The consensus price target is below current market valuations at $199.82.

(Source: Bloomberg) Past performance is not a reliable indicator of future results

Technical analysis: Apple shares float below major technical resistance

Apple shares are in a structural uptrend; however, upside momentum is slowing. Significant resistance is at $200 per share, which coincides with the stocks’ all-time high. A break of that level, potentially off the back of this quarter’s results, could be a bullish signal. Meanwhile, technical support is around $180, with a push below that price signalling a possibly deeper sell-off.

(Source: Capital.com) Past performance is not a reliable indicator of future results

 

 

 

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.