Apple approaches all-time market cap record as investors await Q2 FY17 earnings

AppleInsider

Apple's stock price on Monday hit a new record at the close of business of $146.57, with the stock sitting less than a dollar away from beating the old market capitalization record set in 2015.

With Apple's quarterly earnings set to be revealed on Tuesday at close of business, investors snapped up shares, driving the stock up just shy of $3.00 at the end of a busy trading day. Apple stock rose about 2 percent, and outperformed the market which was up less than 1 percent on the day.

Apple's market capitalization broke $700 billion on Feb. 14, and currently sits at $769 billion, needing to only hit $147.42 per share to eclipse the previous $774.7 billion record. Since the start of 2017, Apple's stock has climbed from $115.82 to Monday's high.

An earlier notable peak for the year was hit on on March 20 was said to be on the strength of the next day's product releases, which turned out to be an inexpensive 9.7-inch iPad, a (Product)Red iPhone 7, and an iPhone SE with double the storage. On March 28, Apple broke through a a $1,000 per share valuation corrected for the split.

Analysts suggest that Apple's share price can climb far higher in fiscal year 2017. While some suggest Apple could climb to between $140 and $150 per share. UBS analyst Steven Milunovich said in a research note that Apple's Services arm is undervalued by investors, compared to other parts of the company, and between it and a "super cycle" in the fall involving the "iPhone 8," Apple could see prices greater than $155 per share.

At the end of April, Wells Fargo analyst Maynard Um has gleaned some data from Qualcomm's reduction in earnings warning. Given that Qualcomm has reduced guidance by $500 million, Um wrote in a research note provided to AppleInsider that this roughly translates into 51 million iPhone unit sales for the last quarter -- similar to the 51.2 sold in the year-ago quarter, and in line with Wall Street's predictions.

IDC believes that Apple sold 51.6 million iPhones in the quarter. "The strong holiday fourth quarter carried into the month of January as the larger iPhone 7 Plus returned to stock across most channels in numerous regions," research firm IDC said in its latest report.

Apple sold a record 78.3 million iPhones in the December quarter, but saw extensive delays on 7 Plus shipments, sometimes as much as 6 to 8 weeks in the case of "jet black" models, leading to IDC's prediction.

spamsandwich

Intraday high today: $147.20

edited May 2017

blastdoor

My impression is that it has been pretty rare over the last 10 years for AAPL to sustain a P/E higher than 17, which is where we are at now. Wall Street seems to require Apple to "prove it" on earnings more than some other companies. 

So I'm guessing that there's more downside than upside for the rest of the year, unless of course Apple really blows through expectations with the iPhone refresh in the fall. 

m/a/r/r/s

It looks like early retirement for me. Go Apple Go. 

strangedays

sog35 said:

like I said many times $150 is a lock.

It's not hard to predict that number when you've been saying the same figure for literally years. Barring castrophe of course they'll reach it sooner or later. You were however years off -- making your prediction abilities pretty shit, actually. 

edited May 2017

carnegie

Based on the last reported outstanding shares count, AAPL would need to close at $147.66 to set a new (on-the-close) market cap record. But Apple will likely report a new outstanding share count (as of sometime in April) which would require a higher per share price to reach that mark. Over the last two years Apple's outstanding shares count has dropped by an average of a little over 70 million per quarter. If it did something like that this last quarter, AAPL would need to get close to $150 to set a new market cap record.

Does anyone want to make predictions regarding announcements that Apple will make tomorrow related to its capital return program? How much has Apple's board increased the share repurchase authorization? And how much has it increased the dividend?

In 2015 the repurchase authorization was increased from $90 billion to $140 billion, and last year it was increased further to $175 billion. As of the end of last year $144 billion of that had been spent. The dividend was increased in 2015 from 47 to 52 cents per share, and then to 57 cents per share in 2016.

5150iii

I think they will hike the quarterly dividend to $.65 per share on tomorrow's call.

gmgravytrain

blastdoor said:

My impression is that it has been pretty rare over the last 10 years for AAPL to sustain a P/E higher than 17, which is where we are at now. Wall Street seems to require Apple to "prove it" on earnings more than some other companies. 

So I'm guessing that there's more downside than upside for the rest of the year, unless of course Apple really blows through expectations with the iPhone refresh in the fall. 

Just keep it in mind, Apple is not a FANG stock so Apple automatically becomes a second-rate investment. There will be no big share price gains for loyal Apple shareholders this quarter like the FANG shareholders got. We'll only get increased dividends and that will have to do. The big investors will continue to pour major money into Facebook, Amazon, Netflix and Google while they leave Apple out in the cold. Even Microsoft and Tesla will be favored over Apple. Apple's P/E will shrink yet again. Apple is still pretty much considered a zero-growth company. Many are certain Apple has again run out of gas and I think only some miracle new product or a big acquisition will change Wall Street's thinking. I'm willing to bet even if Apple is able to repatriate all that overseas cash at a 15% tax rate, Wall Street will find reasons to say that cash has zero value. They'll claim Apple's management as feeble-minded and ignore Apple's potential for growth.

gmgravytrain

blastdoor said:

My impression is that it has been pretty rare over the last 10 years for AAPL to sustain a P/E higher than 17, which is where we are at now. Wall Street seems to require Apple to "prove it" on earnings more than some other companies. 

So I'm guessing that there's more downside than upside for the rest of the year, unless of course Apple really blows through expectations with the iPhone refresh in the fall. 

I still haven't quite figured out why Apple has to prove itself while other companies don't. It's just so weird. I keep looking at the fundamentals and it simply doesn't make any sense to me why Microsoft is valued higher than Apple. Wall Street keeps looking at other companies and saying they have huge future potential. Then they look at Apple and say, "Apple has run out of gas." If it was that easy reading the future, no one would ever lose money in the stock market. Apple's cup is always seen as half-empty and that makes little sense to me.

kevin kee

It's so funny when you read back in Sept last year article like this: Most People Have No Interest in Buying iPhone 7  to just realize how far off people in media and iHaters and Apple-Doom-Sayers living in their alternative universe. 

Meanwhile... 

Apple approaches all-time market cap record as investors await Q2 FY17 earnings.

And life goes on.

edited May 2017

rogifan_new

A lot of tech companies are at all time highs right now aren't they? Amazon's market cap is ~ $450B. Google $630B, Microsoft $530B, Facebook $440B. I'd love to know what's really driving it.

carnegie

rogifan_new said:

A lot of tech companies are at all time highs right now aren't they? Amazon's market cap is ~ $450B. Google $630B, Microsoft $530B, Facebook $440B. I'd love to know what's really driving it.

There are a number of things driving it. For one, we're talking about companies that do a lot of business internationally. Those kinds of companies have generally been leading the way when it comes to strong earnings. Earnings for U.S. companies have generally been good, but earnings for U.S. companies that don't rely predominately on domestic business have generally been great. In very broad strokes (and so not necessarily accurate in specific senses or contexts)... the U.S. economy recovered more quickly than some foreign economies, and now some of those foreign economies are catching up.

For another thing, most of those companies that you mention (along with Apple) stand to benefit if the proposed cut to the corporate income tax rate is passed. That's true even if the rate cut comes with an elimination of most corporate deductions. Google, Microsoft, and Apple also stand to benefit significantly from a lowered rate for remitting as-yet unremitted foreign earnings.

gatorguy

kevin kee said:

It's so funny when you read back in Sept last year article like this: Most People Have No Interest in Buying iPhone 7  to just realize how far off people in media and iHaters and Apple-Doom-Sayers living in their alternative universe. 

Meanwhile... 

Apple approaches all-time market cap record as investors await Q2 FY17 earnings.

And life goes on.

Most people didn't have any plans to buy an iPhone 7 (obviously) so that part was in the ballpark.  But enough did to make it a whole lot more successful than some bloggers would have led us to believe, including that Fortune author.

edited May 2017

spamsandwich

m/a/r/r/s said:

It looks like early retirement for me. Go Apple Go. 

Likewise.

spamsandwich

sog35 said:

SpamSandwich said:

m/a/r/r/s said:

It looks like early retirement for me. Go Apple Go. 

Likewise.

congrats.

hope my SHOP shares can do the same for me in 20 years.

The past 5 years I've been looking for a company that had growth potential like buying Apple in 2001.  I think I may have found it in Shopify.

You'll make a few bucks on it if you got in early, but it's not exactly Amazon.com. I held onto my bloody AMZN shares for a decade before selling them for a meager profit. Shortly after selling, AMZN skyrocketed to current levels, to my chagrin. Oh, well.

strangedays

sog35 said:

StrangeDays said:

sog35 said:

like I said many times $150 is a lock.

It's not hard to predict that number when you've been saying the same figure for literally years. Barring castrophe of course they'll reach it sooner or later. You were however years off -- making your prediction abilities pretty shit, actually. 

wrong.

I said this stock would be $150 in 2015. But crap happenned - China stock market collapse, China economy collapse, dollar value going beserk. If it wasn't for those macro economic events the stock would have reached $150. No one can predict those geo political events.

In 2016 I did not predict $150.

But as 2016 was closing I did say the stock would reach $150 in 2017.

While I don't have the time to audit your posts, by your own admission we heard you go about it in the years 2015, 2016, and 2017 -- three years, same prediction, years off. So...That word, "wrong", I do not think it means what you think it means.

Predicting the same thing for years on end does not make you Nostradamus.

edited May 2017

rayz2016

sog35 said:

StrangeDays said:

sog35 said:

StrangeDays said:

sog35 said:

like I said many times $150 is a lock.

It's not hard to predict that number when you've been saying the same figure for literally years. Barring castrophe of course they'll reach it sooner or later. You were however years off -- making your prediction abilities pretty shit, actually. 

wrong.

I said this stock would be $150 in 2015. But crap happenned - China stock market collapse, China economy collapse, dollar value going beserk. If it wasn't for those macro economic events the stock would have reached $150. No one can predict those geo political events.

In 2016 I did not predict $150.

But as 2016 was closing I did say the stock would reach $150 in 2017.

While I don't have the time to audit your posts, by your own admission we heard you go about it in the years 2015, 2016, and 2017 -- three years, same prediction, years off. So...That word, "wrong", I do not think it means what you think it means.

Predicting the same thing for years on end does not make you Nostradamus.

I was wrong about 2015.
I did not make a prediction in 2016.

So I was wrong only once.  And only because of geo/policital/economic stuff that had nothing to do with Apple.

Planning for the unexpected is part of being a good investor. The fact that you whined for almost a year, and blamed it on everything except your own poor judgement, proves that you're not.