Unrivaled personal tech star Apple (NASDAQ: AAPL) is due to report its Q3 2021 earnings on Tuesday, July 27.
The Apple share price has risen 489% in the past five years. It’s up 49% in the past year and 10% in the last three months. As always, long-term Apple investors are keenly awaiting news of its Q3 results.
The company brought out a dazzling new range of products in the run-up to its Q2 earnings call, which helped boost publicity. The new range included the latest iMac, iPad, iPhone, and AirTag.
During Q3, it has unveiled new software updates, which include iOS 15 and macOS Monterey.
Meanwhile, the outlook for iPhone, Mac, and wearables sales remains strong.
Analyst consensus: Buy
The analyst consensus estimates on its 12-month average price target are $156. But J.P. Morgan recently lifted its target to $175 a share and Wedbush to $185.
Meanwhile, Citi upped its FY21 earnings per share (EPS) estimate to $5.33, from $5.18. Apple’s last full-year EPS came in at $4.47.
Apple is held in 309 exchange-traded funds (ETFs). And is loved by heavyweight institutions and investors alike.
Wall Street expects Q3 earnings to come in around $73bn and EPS at $1.01.
Apple offers shareholders a nominal dividend yield of 0.6%. Its price-to-earnings ratio is 32, and it has a $2.4 trillion market cap.
Apple has not been forthcoming with Q3 revenue guidance, mainly due to the ongoing Covid-19 uncertainty.
However, in its Q2 earnings call, the company previously said:
“We expect our June quarter revenue to grow strong double digits year-over-year.“
But it also pointed to an expected revenue decline from Q2 to Q3. This is down to supply chain hiccups and a drop in the demand seen by the new product launch in Q2.
Nonetheless, Apple recently upped its order of next-generation iPhones by 20% – to 90 million. This news excited investors, but it may in part be to protect itself from future supply chain shortages and to prepare for the Christmas rush.
Shareholder risks
Supply chain troubles continue to pose a threat. The Covid-19 pandemic, semiconductor shortages, and China’s recent flooding have wreaked havoc with global production and delivery schedules.
Regulatory risk is another problem for Apple. All Big Tech companies are increasingly targets for government oversight and potential fines.
Antitrust investigations have been launched against Apple and Amazon (NASDAQ: AMZN) in the US, Italy, and Spain. Apple is also facing rising regulatory scrutiny regarding the way it runs its iOS App Store.
Alphabet (NASDAQ: GOOGL), Amazon, and Facebook (NASDAQ: FB) are all in the same boat.
Conclusion
It’s not just personal tech that Apple sells. It’s also increasingly profiting from its Services. Apple TV+, Apple Podcast Subscriptions, Apple Arcade, Apple News+, Apple Card, Apple Fitness+, the Apple One bundle, Apple Music, plus App Store purchases are all contributing to its growth.
Apple is a long-established company with a strong consumer following and brand loyalty. Its marketing is second to none, and its products or of superior quality.
Long-term shareholders have been handsomely rewarded for their loyalty over the past 40 years, particularly in the past decade.
Day traders may like to buy pre-earnings on the chance to cash in on a quick share price spike. Those investors with a more extended timeframe can take confidence in its strong past performance and future outlook.