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Conflicting Earnings Predictions for Apple Monday

In two separate reports released Monday, analysts are divided on whether Apple will impress or disappoint when it reports earnings Tuesday, July 23 after the closing bell.

Citigroup (NYSE: C) believes Q3 results could fall below the mid-point of the company’s guidance and places an earnings estimate of $7.06 on the stock–well below consensus of $7.31. It blames the possible miss on the global shift towards the lower-end iPhone 4S and weak iPad sales. It maintains its neutral rating with a $430 price target.

In a conflicting report, BMO Capital expects Apple to beat expectations as it benefits from lower warranty expenses as a percentage of income. Although it believes Apple has the ability to sustain strong earnings growth, it states that the smartphone space is suffering a margin squeeze–a headwind for the company. It maintains its Market Perform rating on the stock.

The stock has seen a sharp rise off of its late-June low of $388.87. It challenged its 50 day moving average but failed forcing the stock lower on Friday. It’s up fractionally in pre-market trading Monday. It currently trades at $424.95.

[stock-tools exchange="NASDAQ" symbol="AAPL" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author was long Apple.

 

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