UBS: Apple Stock Likely to Rise Following New iPhone Announcement

If history is any indicator, Apple Inc. (NASDAQ:AAPL) shares are much more likely to advance in the short term following today’s iPhone announcement than they are to decline.

Analysts Steven Milunovich and Benjamin Wilson found that AAPL tends to follow the same pattern for each iPhone event:

  • The stock dips just before the event begins,
  • Then in the 2-3 week period following the event, the stock rises.

Following this series of price moves, Apple stock then tends to fall after the iPhone goes on sale, before recovering prior to its next earnings report (note: AAPL reports earnings next on October 25).

The last three iPhone releases have seen solid share performance. On average, the iPhone 5, 6, and 6s propelled the stock up 4% from event to launch. Then things get a little dicey: following the past four iPhone launches, AAPL has then fallen 4% on average in the two weeks after the device goes on sale. Finally, the last three cycles saw AAPL recover an average of 2% leading up to the subsequent earnings report.

What does this history tell us about how AAPL will react to today’s big iPhone event? Not much. Each product launch is different, and predicting short-term stock price movements is all but impossible.

Regardless, all eyes will be glued to Apple’s big event today, which is slated to begin at 1pm Eastern (10am Pacific).

AAPL-2016-09-07

Apple shares posted small gains in premarket trading this morning, up to $107.90. AAPL has risen 2.32% year-to-date, versus a 7% gain in the benchmark S&P 500 in the same period.

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