{"id":6511,"date":"2016-12-02T22:13:53","date_gmt":"2016-12-02T22:13:53","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6511"},"modified":"2016-12-02T22:13:53","modified_gmt":"2016-12-02T22:13:53","slug":"technology-officially-oversold-stick-with-apple-based-on-estimate-revisions","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6511","title":{"rendered":"Technology Officially Oversold: Stick with Apple Based on Estimate Revisions"},"content":{"rendered":"<p><a href=\"https:\/\/fundamentalis.com\/?attachment_id=6512\" rel=\"attachment wp-att-6512\">sector_snapshots_120116_42i-1<\/a>\u00a0&#8211; A quick snapshot from Bespoke&#8217;s regular Thursday Sector update, shows that Technology is officially oversold.<\/p>\n<p>Not a surprise if you&#8217;ve been watching the trading action of late.<\/p>\n<p>All the FANG stocks, i.e. Facebook, Amazon, Netflix and Google are down roughly 4% &#8211; 5% since the Presidential election on November 8th, while Financial&#8217;s have soared 25%, led by the big banks and brokers.<\/p>\n<p>The GrandDaddy of all the Technology stocks, Apple (AAPL) is still showing positive earnings and revenue revisions for fiscal 2017.<\/p>\n<p>Here is the trend in Apple&#8217;s consensus fiscal 2017 EPS and revenue estimates since Jan 1 &#8217;16:<\/p>\n<ul>\n<li>12\/02\/16: $9.04 and $229.8 billion<\/li>\n<li>11\/30\/16: $9.05 and $229.8 billion<\/li>\n<li>10\/31\/16: $9.00 and $228.7 billion<\/li>\n<li>7\/31\/16: $8.90 and $223.4 billion<\/li>\n<li>4\/30\/16: $9.17 and $227.0 billion<\/li>\n<li>1\/31\/16: $10.60 and $241.8 billion<\/li>\n<li>12\/31\/15: $10.69 and $256.7 billion<\/li>\n<\/ul>\n<p>Readers should note how forward 2017 estimates were cut dramatically after the January &#8217;16 earnings release, but reduced too much before the July &#8217;16, and the release of the latest iPhone in Sept &#8217;16, whereupon the revisions have begun to turn positive again. The actual reception of the iPhone 7 was far better than the expectations coming into the release in September &#8211; October.<\/p>\n<p>Both fiscal &#8217;17 EPS and revenue are still well short of where the estimates were for 2017 a year ago, so Apple has some catching up to do, and it may be why Street analysts have turned cautious on the longer-term, secular growth opportunities for Apple.<\/p>\n<p>Both fiscal 2017 and fiscal 2018 consensus revenue estimates for Apple have fallen 10% from December &#8217;15 estimates.<\/p>\n<p>Here is one last stat I found telling: looking at just the December quarter revenue the last 4 years:<\/p>\n<ul>\n<li>12\/16: $77.4 bl (est) +2% y\/y revenue growth, the first quarter of growth in 4 quarters<\/li>\n<li>12\/15: $75.8 bl (actual) +2%<\/li>\n<li>12\/14: $74.6 bl (actual) +30%<\/li>\n<li>12\/13: $57.5 bl (actual) +5%<\/li>\n<\/ul>\n<p>Expectations for Apple are still pretty low, or &#8211; at the very least &#8211; less enthusiastic, than in the past few years.<\/p>\n<p>A lot of Street analysts are making a longer-term call on Apple. With Samsung&#8217;s issues, I think the stock might have one decent push to the upside ahead of it.<\/p>\n<p>Just one opinion &#8211; clients are long Apple but can change at any time. The plan right now is to hold Apple through the January &#8217;17 earnings reports and evaluate after seeing guidance and results. Typically when we see an Apple iPhone upgrade like the iPhone 7, the cycle lasts two quarters.<\/p>\n<p>Thanks for reading.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>sector_snapshots_120116_42i-1\u00a0&#8211; A quick snapshot from Bespoke&#8217;s regular Thursday Sector update, shows that Technology is officially oversold. Not a surprise if&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[90,123],"tags":[],"class_list":["post-6511","post","type-post","status-publish","format-standard","hentry","category-apple-aapl","category-technology"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6511"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6511\/revisions"}],"predecessor-version":[{"id":6515,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6511\/revisions\/6515"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}