Apple started 2023 with a share price of $129.93, which was below its all-time high of $195.93 reached in July 2022. The company faced some headwinds in the first quarter of its fiscal year 2023, which ended on September 30, 2023. Apple reported a 5.5% year-over-year decline in revenue to $117.2 billion, and a 10.5% drop in earnings per share to $1.88. The company attributed the weak performance to supply chain challenges, inflationary pressures, and lower demand for its products amid the global economic slowdown.
However, Apple also announced some positive news in its latest quarterly update. The company revealed that it now has an installed base of 2 billion active devices worldwide, which is an impressive number that reflects its loyal customer base and strong brand recognition. Apple also said that its services revenue grew by 11.5% year over year to $18.9 billion, reaching an all-time high. The services segment is a key driver of Apple's profitability, as it has a gross margin of over 70%, compared to about 35% for its products segment.
Apple's stock price recovered from its first-quarter slump and reached a new all-time high of $198.23 on November 29, 2023, representing a 52.6% increase from the beginning of the year. The company benefited from the launch of its new products, such as the iPhone 15, which features a 120Hz display, a faster A16 chip, and improved cameras, as well as the new MacBook Pro, which boasts a powerful M2X processor, a mini-LED screen, and a redesigned keyboard. Apple also introduced its first augmented reality (AR) device, the Apple Glasses, which received positive reviews from critics and consumers alike.
Apple's stock price also received a boost from its strong performance in the second quarter of its fiscal year 2023, which ended on December 31, 2023. The company reported a 15.3% year-over-year increase in revenue to $135.7 billion, and a 19.4% rise in earnings per share to $2.24. The company surpassed analysts' expectations on both metrics, as it delivered robust growth across all its product categories and geographic regions. Apple's services revenue also continued to grow, reaching a new record of $20.3 billion.
Apple's stock price closed at $191.35 on December 1, 2023, giving the company a trailing 12-month price-to-earnings ratio of 31.2, which is slightly above its five-year average of 28.6. The company also pays a quarterly dividend of $0.24 per share, which translates to a dividend yield of 0.51%. Apple has a history of increasing its dividend every year since 2013, and it also returns capital to shareholders through share buybacks.
Apple's stock price forecast for 2023 and beyond is generally optimistic, as analysts expect the company to continue to grow its revenue and earnings at a steady pace. The average 12-month price target for Apple is $198.25, with a high of $240 and a low of $54, according to MarketBeat⁵. The company's long-term growth prospects are supported by its innovation, diversification, and loyal customer base, as well as its expansion into new markets such as AR, autonomous vehicles, and healthcare.
Apple is a solid buy for investors who are looking for a reliable and profitable company that can deliver market-beating returns in 2023 and beyond. The company has a proven track record of creating value for its shareholders, and it has a strong competitive advantage in the tech industry. Apple is not without risks, such as regulatory scrutiny, geopolitical tensions, and rising competition, but it has the resources and the vision to overcome these challenges and maintain its leadership position
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