Apple Stock Drop, the Uncertain Future of the Blue Chip Stock

In a time when it seems like all stocks can suddenly drop to much lower than during the 2008 financial crisis, there are few exceptions or outliers that seem as if though they can beat the recession. An Apple stock drop, although somewhat unlikely, is still a very real possibility. Much like other stocks Apple experienced a decline during the late February to early April period before seeing its stock price climb back up to pre-COVID-19 pricing. When thinking about whether or Apple stock will drop it’s important to think about everything that could be happening with the company in terms of product drops, software updates, and consumer shopping levels, as well as the stock’s PE ratio and chart events.

Apple Stock DropCurrent Fundamental Analysis of Apple Stock

Apple stock currently sits at $319.23 per share which is roughly the same price as before the Coronavirus drop. It has a PE ratio of 25.08, which means investors who buy this stock are paying 25 times the current share price divided by earnings per share. As a result, Apple stock is overvalued. Now, just because the stock is overvalued doesn’t mean you shouldn’t buy it, it just means that you will likely make less of a profit off of it as an undervalued stock that will perform the same. Chart events currently predict a fairly neutral short-term future, however, mid-term and long-term, Apple looks like it will be green. This fundamental analysis shows that Apple is a fairly solid stock with few issues and hopefully, a good third and fourth quarter ahead of it.

Future of Apple Stock

The future of Apple stock, much like many other stocks, is uncertain. This is not just because of the standard mystery surrounding the stock market and its inner workings, but rather because of the pandemic that has took a major toll on the economy and consumer shopping. This can be seen in the closing of many JCPenney, Macy’s, and Dillard’s locations. Retail is simply not as strong as it was pre pandemic. This is due to the fact that many people have lost their jobs. No job means less income, and less income certainly means less expendable income, leading to many consumers trying to save money and only buy necessities.

Will Coronavirus Kill Appleā€™s Revenue?

Apple is a major corporation with a monopoly on beautiful electronics and high functioning personal computers. Apple is not going anywhere and is a safe stock to invest in long-term, all the time. As for this year, it is still unknown whether or not the economy will begin to recover and consumers will flood the market again when the pandemic begins to settle and the holiday season begins to roll around with the release of many brand new Apple electronics, including a possible release of the iPhone 12. The new iPhone could be a make or break for Apple, showing whether or not consumers are ready to get back out and spend their money on non-necessities.

Can Apple Recover Even if it Does?

In the event that Apple does suffer major losses in the coming months Apple will certainly recover. Like I said, Apple is a huge corporation with an extremely large user base which is unlikely to falter for cheaper alternatives. Many people may skip buying the brand new iPhone this year , but as soon as they have the money to in a couple months after the release or up to a year after the new release they will flood the stores and there will be a line just like always outside the Apple store.

Sources:

https://morningstar.com

https://money.cnn.com/data/markets/

 

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