Now that Apple's (AAPL) fiscal Q3 is about to end, this article lists down a few of the catalysts for Apple's stock in its fiscal Q4, which is between July and September. Some of these catalysts are certainly in Apple's favor while some might end up hurting the stock if things do not fall in place.
Let us get into the details
- Dividend: Sure, the dividend news has been public since March of this year. All we know right now is that the dividend payments will start in the 4th fiscal quarter but the date is not set yet. Stocks nearing ex-dividend date usually run up a bit in price and the fact that this is Apple's first dividend since 1995 could add a bit more fuel.
- Apple Television: About a week ago, it was reported that Apple is getting LCD TV panels from its supplier. While no one knows for sure if/when Apple is really going to launch the TV, the noise is getting louder. If there is a holiday quarter (2013 Q1) launch, the stock could pick up some positive momentum towards the end of Q4. However, on the same note, any delay or hint of bad news will push the stock price down heavily. Apple is no stranger to going down because of these rumors.
- iTunes & iPod: The way iPhones and iPads have been selling, it very likely most people have forgotten Apple's iTunes and iPod. Not Apple ! News has been floating around that Apple is planning on some of the biggest changes to iTunes since 2003. Given, iTunes stores' vast library (28 million songs and 45,000 movies), this refresh could add some spark to Apple's first mega-product, the iPod.
- Q3 Earnings and PE Range:Apple's trailing twelve month [TTM] EPS is $41 right now, giving it a PE of 13.8 at the current price per share of $569. The expected EPS for Q3 is $10.32. Assuming Apple beats the estimates by even 15% (its past 4 quarters average beat is 22%), the TTM EPS would grow to $45.1
Even though Apple is famous for its PE compression, it has traded with a PE between 12 and 16 almost always since the beginning of 2011. That puts the stock at a trading range of $540 and $720 with the expected TTM EPS. Even the usual Apple PE of 14 gives it a PPS of $630, a solid 10% away from the current price. If you are a short term trader, the 12 to 16 PE range would be your entry and exit points respectively, based on recent history.
- Surrendering Competitors: Dell Inc (DELL) reported bad numbers and Apple is pointed out as the main reason. Hewlett-Packard (HPQ) reported "soft laptop" sales and you know who is spoiler. Let us not even get into the mess that is Research In Motion (RIMM). Amazon (AMZN) somehow manufactured an earnings beat recently but that does not hide the true story in the tablet market. While these aren't particularly new developments, numbers from the most recent quarters of these companies suggest more prosperity for Apple in Q3, Q4 and beyond.
Disclosure: I am long AAPL.