Apple share price on watch as 'most significant' Apple event in years looms

In this article we examine:

The Apple share price is likely to be closely watched by investors in the lead up and aftermath of the tech giant’s upcoming Apple event, set to take place on October 13, at 10 AM Pacific Time.

In an event that Morgan Stanley’s Katy Huberty has described as ‘its most significant in years’ – Apple is expected to reveal a line-up comprised of four new iPhones and other potential devices.

Though Apple’s share price has faced selling pressure over the last month – amid a broad based decline in US tech stocks – enthusiasm around the company’s upcoming event appears to have driven up investor enthusiasm. On Monday, the stock was bid 6.35% higher to $124.40 per share – leaving Apple trading around the price range it stood at before initiating its August 28 five-for-one stock split.

Despite that short-term softness – it’s been a strong year for Apple and big tech more generally – with the iPhone maker up approximately 65% since January. This comes as investors have aggressively re-rated the stock over the last two years: During Q4 CY18 Apple traded ~12x earnings; it currently trades at ~37x earnings – well ahead of the Nasdaq’s PE of ~22x.

The 5G factor: The Apple event in focus

Centrally, many are expecting Apple to reveal a suite of 5G-compatible iPhones as part of tomorrow’s Apple event – with the tech giant’s cornerstone tagline for the event reading: ‘Hi, Speed’.

On a more granular level, speculation is that Apple will launch four new iPhone models, including:

• A small, 5.4 inch iPhone 12 (the mini)
• A regular, 6.1 inch iPhone 12
• A 6.1 inch iPhone Pro
• An upsized 6.7 inch iPhone Pro Max

Other products that may be revealed during Apple’s upcoming event include: an Apple branded wireless charging device, details of a new operating system, AirPods or even a long-rumored AirTags – a small Bluetooth tracking device that could be used to track small goods such as wallets and keys.

Morgan Stanley remains bullish before the Apple event

Despite Apple’s strong YTD performance analysts from Morgan Stanley (MS) have remained bullish on the stock heading into tomorrow’s event, recently saying:

‘We remain buyers of Apple shares ahead of the event and anticipate strong global iPhone demand to drive positive earnings revisions and stock outperformance throughout FY21.’

Off the back of this expected demand, MS raised their fiscal 2021 iPhone shipments forecasts to 220 million units up from 218 million units, arguing that:

‘We believe the iPhone 12 launch comes at a key time as iPhone replacement cycles have lengthened to over 4 years exiting FY20 […] beyond what we consider to be a structural ceiling.’

Apple share price: The technical outlook

Examining Apple’s price action from a technical perspective, IG’s Victoria Scholar pointed out that:

‘With the RSI pointing higher once again and posting higher lows. If the stock continues to rally, the next resistance level is likely to be at the all-time intraday high from September on the IG platform at $138.82.’

‘But before that the stock needs to break above psychological resistance at $130,’ it was added.

Apple last traded at $124.40 per share.