welcome to the investors trading academy eventof the week. each week our staff of analysts and educators tries to provide you a betterunderstanding of a major market event scheduled soon and that have an effect on the globalmarkets. apple's fiscal 2016 earnings report is nowscheduled for monday, april 25th. apple ceo tim cook and cfo luca maestri are expectedto review apple's january through march quarter
apple share price trend, financial results and give us their projectionsfor q3. in the previous earnings report on january25th, apple estimated that its revenue for q2 would be between $50 and $53 billion, andthat created a stir because that's projected to be less than a year ago in q2 of $58 billion.observers wondered if iphone sales are peaking,
since they account for well over 60 percentof apple's total revenue. we're looking to see how conservative apple was.it is expected that apple will release the newest model of its flagship device laterthis year. apple’s conviction buy rating means that goldman ranks the iphone firm amongits top-recommended stocks. goldman has a $155 12-month price target on apple shares.on tuesday, apple shares closed up 1.3% at $110.44. year to date, the stock is up almost3% while in the last one-year, it is down over 13%.apple shares have rebounded nicely since the february 11th market low, trading at nearly$109 per share as of friday’s close. that rebound seems to have been caused by portfoliorebalancing rather than fundamental improvement.
a noted aapl analyst pointed out two hugefundamental negatives for apple in a note late last week: “sluggish phone sales inthe us and overseas…accounted for…the expectation for an 18% decline in iphonessold in the march quarter compared to last year. we no longer expect apple to returnto revenue growth this fiscal year and forecast a 4% decline in revenue for the year.â€so, apple just hasn’t been selling that many iphones. if the shares had fallen 10%in the past 2 months i’d say that’s “in the stock,†but they have actually risenmore than 10% in that period, so i think goldman sachs note was a warning signal on aapl andi’d watch for more such signals in the next two weeks.for those who are a bit less patient, goldman's
options research team has an alternative tobuying and holding. they recommend that traders buy short-term calls, based on the perceptionof that analyst, simona jankowski, that apple will impress in its april 25 report. the earningsevent is "likely to be a bigger-than-expected positive catalyst for shares," they wrote.specifically, in their wednesday-dated report, goldman recommends buying the 111-strike callson apple expiring on april 29, the friday after earnings.
