"Analyzing Historical Patterns: Promising Trading Set Up for Apple Ahead of Earnings"

## Positive Setup for Apple Shares Expected, says Morgan Stanley Morgan Stanley analyst Erik Woodring believes that if history is any indication, there will be a positive setup for Apple shares if the company raises expectations for the September quarter. Woodring expects Apple to report an in-line June quarter on August 3, but expects the company to revise guidance upward due to improving iPhone trends, seasonal computer strengths, and cyclical tailwinds. According to Woodring, this type of setup has historically led to the greatest outperformance in Apple's stock in the day, week, and month following earnings, with Apple outperforming the S&P 500 by an average of 10 points in the month after raising September quarter guidance over the past decade. Woodring emphasizes that June quarter earnings have been a positive stock catalyst for Apple and that September quarter guidance matters most for the company's stock. Apple has consistently beaten June earnings estimates by an average of 9% over the past decade, and Morgan Stanley expects them to do so again. In fact, the company has revised revenue and EPS guidance higher in seven instances. When these revisions come in ahead of consensus, Apple's stock outperforms the S&P 500 by 5 to 10 points within the day, week, and month following. Woodring is confident in Apple's prospects, stating, "With our September quarter revenue and EPS 4-9% above current Consensus, and a shade above buyside expectations, we expect earnings to be a positive catalyst for Apple shares next week." Morgan Stanley remains bullish on Apple and views it as a top pick. They have an overweight rating on the stock and a $220 price target, reflecting a 14% upside from Monday's close. While the firm acknowledges that demand may be stable but subdued compared to a year ago, they expect upside to services and Mac revenue, surpassing Street expectations. Apple shares have seen a significant rally of nearly 49% since the start of 2023. ## Conclusion: Implications for a New Business The positive setup for Apple shares, as anticipated by Morgan Stanley analyst Erik Woodring, may have implications for a new business in the tech industry. Apple's consistent ability to surpass earnings estimates and raise revenue and EPS guidance has historically resulted in strong stock performance. For a new business, this suggests that exceeding market expectations and demonstrating strong growth potential can have a significant impact on the company's stock market standing. By consistently outperforming consensus estimates, a new business can potentially attract investor interest and drive stock prices higher. Furthermore, the positive outlook for Apple's September quarter, driven by improving iPhone trends and seasonal computer strengths, highlights the importance of constantly innovating and adapting to market demand. For a new business, it reinforces the need to stay agile, identify customer needs, and develop products or services that can capture the market's attention. However, while Apple shares have seen a substantial rally in recent times, it is essential for a new business to carefully manage expectations and deliver on promises. Consistency and reliability in meeting or exceeding forecasts are crucial factors in maintaining investor confidence and sustaining stock market performance. In conclusion, the positive setup for Apple shares underscores the value of strong financial performance and guidance revision for a new business's stock market success. By focusing on exceeding expectations, staying innovative, and delivering consistent results, a new business can potentially attract investors, drive stock prices higher, and pave the way for future growth. Article First Published at: https://www.cnbc.com/2023/07/25/history-shows-apple-trading-opportunity-ahead-of-next-weeks-earnings.html