Should you buy Apple shares ahead of its Q1 earnings report?

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Shares of Apple Inc (NASDAQ: AAPL) are not worth buying ahead of its first quarter financial results scheduled for this week, says Dan Niles. He’s the Senior Portfolio Manager of Satori Fund.

Apple to report a rare decline in revenue

Consensus is for the tech behemoth to report $121 billion in revenue for the holiday quarter – its first annualised decline since 2019.

On top of that, Niles continues to see Apple shares as overvalued at 24 times forward earnings. On CNBC’s “Closing Bell”, he said:

I wouldn’t touch Apple. This company was not growing revenues in 2019. And don’t forget smartphones unit sales for the entire industry were down four years in a row.

Apple Inc is expected to earn $1.94 a share this quarter, also down from $2.1 a year ago.

Niles says demand is weakening as well

Niles’ view is in stark contrast with the Wall Street that continues to rate Apple shares at “overweight”. But the Founder of Satori Fund said:

Market wasn’t growing before the pandemic and people still like it because most of us are carrying an iPhone in our pocket. You don’t want to confuse a product with a stock. That’s a big mistake, especially if the multiple is high.

In November, Apple confirmed itself that production issues were likely to weigh on shipments this quarter. According to Dan Niles, though, even the demand side of the equation seems to be weakening at Apple Inc as well.

Another headwind for the multinational as a high-flying growth name could be the eighth consecutive rate hike from the Fed expected on Thursday.  

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