Hedging Apple Into Earnings May be Best

Apple’s (AAPL) earnings are up next.

And analysts, like Wedbush’s Daniel Ives, are bullish.

In fact, according to the analyst, Apple’s iPhone revenue should be in line with expectations when it reports earnings on Thursday. At the moment, expectations are for Apple to report sales of $92.91 billion, with $48.8 billion of that figure coming from iPhone sales.

“We believe iPhone units […] could show some upside despite the shaky macro as higher ASPs [average selling prices] and overall upgrade activity on iPhone Pro 14 carry the day,” Ives said, as quoted by Barron’s.  The analyst also reiterated his firm’s outperform rating on AAPL with a $205 price target.

Bank of America analysts also raised their price target on AAPL to $168. According to TheFly.com, “Changes to BofA’s model have been made after checks showed that the iPhone and Services trends ‘are stable to better,’ further supported by the falling dollar. The analysts expect to see a re-acceleration in Services growth starting from Apple’s FQ3.”

However, while some analysts are bullish, investors may be safer with a hedged bet. For one, Apple is sitting at major resistance dating back to late 2022.

Two, its valuation is a bit stretched. In fact, according to a Seeking Alpha article, “the sheer size makes it difficult to find new markets and invent new products big enough to move the needle. When you have annual revenues of almost $400 billion it is next to impossible to grow at double-digit rates over the long run.”

A guest on CNBC also says hedging into Apple earnings might be a good move.