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Why Apple (AAPL) Stock is a Strong Sell Right Now

Apple AAPL has recently received the unfavorable Zacks Rank #5 (Strong Sell).  The rank is directly tied to earnings related stats, including movements in our EPS expectations.  The Cupertino tech giant is coming off its first quarterly sales decline in many years.  It reported earnings of $1.90 per share, missing on our EPS consensus estimate of $1.97 by -3.55%.  Since Apple released its Q2 earnings, analysts have been revising their earnings expectations lower across the board.

24 analysts have revised their earnings estimates for this quarter over the last 60 days.  They have unanimously revised their Q3 expectations lower.  This has brought our quarterly consensus estimate down, and it has gone from $1.71 to $1.41 over the last 30 days.

For the current year, 32 analysts have revised their estimates lower over the last 60 days.  In that span of time, no analysts have revised their earnings expectations higher.  Our earnings consensus for this fiscal year has fallen considerably, going from $9.02 to $8.40 over the last 30 days.  It should be noted that our consensus for the next fiscal year has dropped over the last month, going from $9.92 to $9.21.

Bottom Line

Movements in analyst expectations are important to consider when investing in stocks.  You may feel optimistic about Apple, but since estimates have been revised lower for the company as recently as seven days ago, it may be wise to wait and see if analysts continue to lower their EPS expectations for AAPL before making a move on the stock.

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