Apple To Earn More From Separate iPhone 5 & iPad Mini EventsVW Staff
Apple Inc. (NASDAQ:AAPL) will be launching its iPhone 5 tomorrow, but iPad mini could be the next one soon after. According to Barclays PLC (LON:BARC) (NYSE:BCS) Equity Research, the upcoming back to back Apple Inc. (NASDAQ:AAPL) announcements (as predicted), could result in increased performance by the company in the next six months.
It rarely happens that a compony does what Apple is about to do in the coming few weeks, starting tomorrow. Many analysts, including Goldman Sachs Group, Inc. (NYSE:GS) Equity Research, and now Barclays PLC (LON:BARC) (NYSE:BCS), have predicted that iPad mini announcement may not be part of the events slated to unfold tomorrow during Apple's big day, but it is very much likely that Early October would be the date, therefore, separating the two events by a little less than four weeks.
According to the charts, Apple Inc. (NASDAQ:AAPL) has continuosly matched S&P500 (INDEX.INX) performance during the first three months after making such announcements, and outperformed the Index (SPX), withing the first six months of a major announcement. Barclays Equity Research believes that the impending announcement of the iPad mini in early October, will further boost Apple Inc. (NASDAQ:AAPL) performance.
Additionally, Barclays believes that the big sell-off might have already began days before the big September 12th date. This would therefore signal the anticipation of the eager retailers, once the iPhone 5 hits the market.
Apple Inc. (NASDAQ:AAPL) fourth quarter earnings are expected to decline as compared to third quarter earnings. This is mainly because of the slowdown in the Chinese and U.S markets as reported earlier, as well as the delay of purchases by customers waiting for the iPhone 5 device. Barclays Equity research believes that, a back to back announcement would limit any negative impact by quarter over quarter decline in earnings report, on the company's stock.
Apple's results for the fourth quarter have always usually been lower than Q3, and this year should be no exception. Nonetheless, the company is expected to outperform last years results by about 21%, while a similar period in 2013 will outperform this year's Q4 earnings by 49%.
The company's price to earnings (P/E) ratio is expected to decline going forward, with 2012 expected to be at 15.1, while 2013, should decline further to 12.9, as the company's earnings per continue to rise.
Apple Inc. launched its new iPad in March, following the tradition of launching the iPad several months before the new iPhone is launched, but this time around, things are a little different as the company will be launching its iPad mini soon after the iPhone. Some predict that the iPad mini could be announced together with iPhone 5.
Barclays maintains a price target of $750 for Apple Inc. (NASDAQ:AAPL), which is approximately 12.44% increase from the current market price.
Apple stock has rallied below the $400 mark, to a high of $683 reported last week, though now, has lost some of last week's gains, as investors await for the September 12, announcement.
Apple inc. (NASDAQ:AAPL) faces competition from the recently launched devices by Nokia Corporation (NYSE:NOK), which announced the launch of Nokia Lumia 920 Windows 8 Smartphones; Motorola Solutions Inc. (NYSE:MSI)'s three new Droid Razr models, and Amazon.com inc. (NASDAQ:AMZN)'s new Kindle Fire HD tablets. The three companies announced their products last week, just ahead of Apple's big announcement tomorrow.