New Apple Product Event May Not Boost Stock Price

Investors hoping that the launch of a new model line of Apple (AAPL) products will boost its stock price may be in for a disappointment.  Over the past 10 years, Apple’s stock price has fallen seven times on the day the company launched a new model line.  Apple will announce its latest iPhone model at a new product event later today.

Many analysts believe Apple will boost the price of its newest iPhone in an attempt to cushion its margins from inflationary pressures.  However, such moves are fraught with risk as a weakening economy may make buyers reluctant to pay more for the newer iPhone model.  JPMorgan Chase said, “investors will be keenly watching iPhone prices in the backdrop of an increasingly challenging macro with concerns around consumer spending.”

Historically, the price of Apple stock has rebounded a couple of months after a new iPhone launch event, as early sales figures trickle in.  However, even after the last two iPhone announcements, Apple’s stock price is down 13% this year, heading for the first annual decline since 2018. Despite this year’s losses, Apple is the top performing mega-cap technology stock this year as investors have faith the company will tap into its more than 1 billion customers to earn more on its services, including apps, video, fitness, and gaming subscriptions. 

Some analysts predict Apple will boost prices on its higher-end Pro models that cater to a more affluent buyer while lowering the price of older iPhones to lure budget-conscious buyers.  Bank of America expects a 20-cent bump in earnings per share if Apple hikes the prices of its Pro models by $50.  Analysts project Apple’s earnings will increase by 9% in 2022 and 6% in 2023, compared to projections for annual sales increases of 7% this year and 5% next year, according to Bloomberg data.

Loup Ventures said the next catalyst for Apple stock will be earnings for the quarter ending in September, which will be reported in late October.  Loup said, “at that time, we expect Apple will reassure investors that while the company is not immune to a slowdown, their products remain in demand and sales will grow year over year in the December quarter.”

• Stocks Tend to Fall in the Fall
• Stocks Push Higher as T-Note Yields Fall
• Stocks Fall on Hawkish Fed Comments
• 3 Iron Condor Trade Ideas For September 7th