Apple shares have weakened from their recent highs above $140, and the current price stands around $128. Apple reported better than expected second-quarter results last week, and the company increased the quarterly dividend by 7.3%.
Fundamental analysis: Morgan Stanley raised its target on Apple from $158 to $161
Apple shares are trading below the $130 level in the first trading week of May, but according to the technical analysis, shares of this company continue to trade in a bull market. Investors are selling tech-related companies amid concerns about the rising interest rate and uncertainty over an upcoming jobs report.
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Investors have started to behave nervously after comments from Treasury Secretary Janet Yellen, who said that the FED might need to hike the interest rate. Apple reported second-quarter results last week; total revenue has increased by 53.7% Y/Y to $89.6 billion while the GAAP EPS was $1.40 (beats by $0.42).
Total revenue has increased above the expectations (+$12.31 billion), and the company declared a $0.22/quarterly share dividend, which represents a 7.3% increase from the prior dividend of $0.205. The gross margin rose 42.5% from a year ago, while the net income more than doubled and rose to $23.6 billion from $11.25 billion.
Each geographic segments has reached strong double-digit growth: Americas $34.3 billion (+35%); Europe $22.3 billion (+56%); China $17.7 billion (+88%); Japan $7.7 billion (+9%); Rest of Asia Pacific $7.5 billion (+94%). Another positive information is that iPhone sale advanced above expectations and topped $47.9 billion in net sales.
“We are proud of our March quarter performance, which included revenue records in each of our geographic segments and strong double-digit growth in each of our product categories, driving our installed base of active devices to an all-time high,†said CFO Luca Maestri.
Apple expects that this trend continues in the third quarter while the company’s management authorized an increase of $90 billion to the existing share repurchase program. Analyst firms remain positive on Apple after the second-quarter report; Raymond James maintained a “buy “rating with a $185 price target while Morgan Stanley raised its target from $158 to $161.
Morgan Stanley is impressed by the second-quarter results and with the fact that Apple boosted the dividend and buyback program.
Technical analysis: Apple shares continue to trade in a bull market
Technically looking, Apple shares could advance above the $140 resistance level this month; still, if the U.S. stock market enters a more significant correction phase, the share price could be at much lower levels.
If the price jumps above $135, it would be a signal to trade shares, and the next target could be around $140. Rising above $150 supports the continuation of the bullish trend for Apple shares, but if the price falls below $110, it would be a strong “sell†signal.
Summary
Apple shares have weakened from their recent highs above $140 even though the company reported better than expected second-quarter results last week. Raymond James maintained a “buy “rating on Apple with a $185 price target, while Morgan Stanley raised its target from $158 to $161.
