Apple is facing a 'low bar of expectations' but it might work in the company's favor

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Apple is facing a 'low bar of expectations' but it might work in the company’s favor.

has had a strong 2019 so far, with the stock up more than 45% since the company hit a low after it announced a revenue shortfall on Jan. 2. The iPhone maker continues to mint money, too, and has projected that it will book at least $52 billion in revenue when it reports earnings after Tuesday's closing bell.

"Investor sentiment remains negative despite improving iPhone and Services data points, with low expectations for Sept. quarter suggesting a positive setup into earnings," Morgan Stanley Katy Huberty wrote on July 22. Last quarter, only 53% of Apple's total $58.01 billion in revenue came from the iPhone. That's because of Apple's growing services business, including App Store fees and online subscriptions, which made up 19% of Apple's revenue in the second-quarter, a record for the company. Analysts will be closely watching the services business for strong growth — Huberty expects Apple will post services revenue 20% higher than a year ago, but the Street is looking for 15%.

"We expect the narrative to shift more towards new services launch in 2H and to a 5G story heading into 2020," Bank of America Merrill Lynch analyst Wamsi Mohan said in a note Wednesday.

 

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That's why each year so many companies best. Low bar of expectations from the investment firms (the street). These investment firms want to see these stock prices increase.

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