After putting up an encouraging bounce back to $470 at the end of March, shares of Apple Inc. (NASDAQ:AAPL) have promptly given back nearly all of those gains. The Mac maker dropped by as much as 1.5% on Friday, in part because of the disappointing jobs report that dragged down the broader market.
In the final hour of trading, shares tanked for no apparent reason to as low as $419.69 — just pennies away from tapping a fresh 52-week low. Shares promptly recovered just as quickly and inexplicably.
Will Apple Inc. (NASDAQ:AAPL) hit a new low?
Never say never
Shares have mostly stayed range-bound for the past couple of months following the January earnings plunge, lacking any positive or negative catalysts to speak of. The most apparent positive catalyst that investors are anxiously awaiting remains the inevitable dividend boost, but all has stayed quiet on the cash front so far this year.
The biggest potentially negative catalyst on the horizon is the fiscal second-quarter earnings release that’s due out on April 23. The March quarter is a seasonally slow one for the iPhone maker, and there’s a distinct possibility that Apple Inc. (NASDAQ:AAPL) may miss consensus estimates. On top of that, this will be the first earnings release under Apple Inc. (NASDAQ:AAPL)’s revised guidance philosophy, so investors really have no idea how to interpret its forecast of $41 billion to $43 billion in revenue or CFO Peter Oppenheimer’s vague description of the change:
In the past we provided a single-point estimate of guidance that was conservative, that we had reasonable confidence in achieving. This quarter and going forward we’re going to provide a range of guidance that we believe that we’re likely to report within.
Not only will March be a tough quarter, but the June quarter may be even more challenging. There are numerous flagship smartphones launching in April, including Samsung’s Galaxy S4 and HTC’s One, while consumers and investors are expecting new iPhones as early as this summer.
BTIG Research analyst Walter Piecyk fears that June guidance could potentially drive shares below $400, even as he recently upgraded shares to “buy” with a $540 price target and thinks the risk is worth taking.
Since Apple Inc. (NASDAQ:AAPL) had such a monster 2012, it’s facing tough comparisons this year. Trailing-12-month EPS is projected to decline over the next couple of quarters.