Expectations for Apple earnings set so low stock not expected to drop, analyst argues best time to buy

9to5 Staff | Jan 25 2019 - 11:31 am PT

An analyst for Morgan Stanley said today that expectations for Apple’s Q1 2019 earnings are already set so low, that now marks perhaps the most ideal time to invest in the company.

Basically, the “bad news” regarding weak iPhone sales has already seen such a heavy response from the most fickle investors, that whatever Apple announces on Tuesday will most likely not tank the stock any more volatile than usual.

An analyst for the bank, Katy Huberty, said,

We believe the recent pullback is an attractive entry point given upcoming services launches and shares already pricing in extremely cautious iPhone replacement cycle and average selling price headwinds. March quarter guidance will provide a base for forecasts during the remainder of the year… Apple likely needs to deliver a better than feared revenue outlook for shares to recover further in the very near-term

Based on investor conversations, we believe the stock could trade up on revenue and gross margin guidance range of $58 billion and 38 percent at the mid-point, respectively, while guidance meaningfully below these levels would fuel the bear case. (Via CNBC)

The bank gives AAPL a 12-month price target of $211 per share. Other firms have also revised their price targets for the stock, with one analyst from D.A. Davidson cutting his expectation for AAPL to $245.

Though a handful of investors are behaving bearishly towards AAPL, some are calling to buy on the “big dip”.

On Thursday, we reported on yet another Japanese carrier offering about $100 off iPhone XR following continually weak sales. As for whether the discounts translate to improved sales when Apple announces holiday season earnings on January 29 remains to be seen.

Currently, AAPL is being traded at just under $158 a share after falling to around $152 just days ago.