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

Stock in Apple Inc (NASDAQ: AAPL) isn’t worth buying ahead of the company’s first-quarter earnings report this week, said Dan Niles. He is the Senior Portfolio Manager of his Satori Fund.

Apple Reports Rare Sales Decline

The consensus is that the tech giant will report $121 billion in revenue in the holiday quarter, its first annual decline since 2019.

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What’s more, Niles continues to see Apple stock overvalued at 24 times expected earnings. On CNBC’s “The Closing Bell,” he said:

I don’t touch Apple. This company did not grow its revenue in his 2019. Also, let’s not forget that industry-wide smartphone sales fell for his fourth consecutive year.

Apple’s profit for the quarter is expected to be $1.94, also down from $2.1 a year earlier.

Niles says demand is also weakening

Niles’ view stands in stark contrast to Wall Street, which continues to rate Apple stock as “overweight.” However, the Satori Fund founder said:

The market wasn’t growing before the pandemic, but people still love it because most of us carry our iPhones around in our pockets. I don’t want to confuse product with inventory. This is a big mistake, especially if the multiples are high.

In November, Apple confirmed that manufacturing issues are likely to weigh on shipments this quarter. But even the demand side of the equation seems to be weakening at Apple as well, according to Dan Niles.

Another headwind for multinationals in the name of high growth could be the Fed’s eighth consecutive rate hike expected on Thursday.

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