Apple share price: Q1 2022 earnings preview

When are the Apple results?

Apple Inc. the world’s largest company by market capitalization, is set to report first-quarter (Q1) 2022 earnings on 27 January 2022.

What ‘the Street’ expects from Apple Q1 2022 results?

Apple Inc. no longer issues forward guidance for its quarterly results since the Covid-19 pandemic’s disruption to supply chains and in turn the uncertainty pertaining to future earnings.

Q1 has historically been the strongest quarter of the year for Apple as it reports on the 3 months ending December, benefitting from pent-up holiday demand most notably for the latest installment of its iPhone. iPhone sales led by the iPhone 13 could account for more than 60% of group revenue in the reporting period. High single-digit to low double-digit growth is expected from Mac sales. Wearables are expected to deliver mid-single-digit sales growth while service revenue is likely to see only marginal growth if any.

A consensus of estimates from Refinitiv data for the upcoming first quarter (Q1) 2022 Apple results arrive at the following:

• Revenue for the quarter of $118.547 billion: +6.38% year-on-year (YoY)
• Earnings per share (EPS) for the quarter of $1.89: +12.37% YoY

How to trade Apple results

In terms of an institutional view, as of 21 January 2022, a Refinitiv poll of 43 analysts has an average rating of ‘buy’ for Apple, with a long-term price target (mean) of $180.84.

In terms of a retail trading view, as of 21 January 2022, IG client sentiment data shows 86% of IG clients with open positions expect the price to rise in the short term, while 14% expect the price to fall in the near term.

Apple share price – technical view

The share price of Apple continues to correct in the short term along with the company’s tech sector peers. The correction follows the stock trading in overbought territory and was prewarned by the head and shoulders chart pattern (shaded).

The long-term uptrend for Apple does however remain firmly intact. Traders respecting the longer-term uptrend will be looking for signs that the correction has ended before looking for a long entry.

The 156.60 level finds a confluence of both trend line and horizontal support and provides the next downside target should the correction persist. For long entry, we are looking for a sharp bullish price reversal before this level, accompanied by a move out of oversold territory from the Stochastic oscillator.

Summary

• Q1 2022 results are scheduled for 26 January 2022
• Revenue for the quarter of $118.547 billion expected
• EPS for the quarter of $1.89 expected
• The average long-term broker rating consensus for Apple is ‘buy’
• 86% of IG clients with open positions on Apple expect the price to rise in the near term
• The long-term trend for Apple remains up, although in the short term we are seeing a correction from near-term highs.