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Why Apple's Next Earnings May Be Stronger Than You Think

As the world's most talked about company, it's tough, even difficult to get an edge on Apple (AAPL) repeatedly. However, there may be one data point that proves not only is Apple going strong, but could forecast a higher share price soon.

Cantor Fitzgerald analyst Brian White noted his proprietary Apple Barometer came in well above what it's done historically, which should bode well for both Apple and its suppliers.

"Given Apple's powerful iPhone cycle, the momentum we see around the iPhone in China this week, and the upcoming launch of Apple Watch, we believe there is still plenty to look forward to at Apple during this transformational cycle," White wrote in a note.

White recently put a $1 trillion valuation target on Apple,which equates to a $180 price target.

The Apple Barometer, which is comprised of Apple suppliers and accounts for approximately 81% of sales reported, saw March figures rise between 42% and 44% month over month, well above the 10-year norm, at 28%. It's also significantly better than the average of the past four years, up 24% month over month. By comparison, White noted "sales for our Apple Barometer rose by 34% MoM in March 2014."

With the strong performance of the Apple Barometer for March, White expects sequential sales to fall less then they usually do, implying earnings estimates may be too low for Apple.

White expects revenue to decline 25% quarter-over-quarter, while the mid-point of Apple's second quarter guidance would be a 28% sequential decline.

Analysts expect Apple to generate $55.56 billion in revenue for the fiscal second quarter.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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