How Apple's stock moves before and after an iPhone launch

JP Mangalindan
·Chief Tech Correspondent

Apple (AAPL) stock was up on Monday, a day before the company is expected to announce its highly anticipated 10th anniversary iPhone. This is not too much of a surprise: When Apple launches a new iPhone, it has implications not just for the smartphone industry as a whole, but also for Apple’s own stock.

The launch of a new iPhone usually means good things for Apple stock performance. RBC Capital Markets estimates Apple stock could see a 10% returns this time around because of the upcoming iPhone 8, a rendering of which is pictured above.
The launch of a new iPhone usually means good things for Apple stock performance. RBC Capital Markets estimates Apple stock could see a 10% returns this time around because of the upcoming iPhone 8, a rendering of which is pictured above.

A report by RBC Capital Markets analyst Amit Daryanani in August reviewed price returns for Apple stock in the one, three and six months leading up to an iPhone launch and the one, three and six months following that launch.

The two charts below trace returns all the way back to the iPhone 4, which Apple announced in June 2010.

According to Daryanani, Apple stock typically performed well going into an iPhone launch, with a median price return 90 days prior of 15.6%, which outperformed the 10.9% gain in the S&P 500 during the same periods.

It’s worth noting that price returns were noticeably worse in the run-up to the iPhone 5s and iPhone 6s launches — years when Apple was expected to release phones with only minor upgrades rather than an all-new design.

Price returns for Apple stock in the lead-up to an iPhone launch.
Price returns for Apple stock in the lead-up to an iPhone launch.

Price returns post-iPhone launches proved a slow burn, with the most significant returns arriving between 90 and 180 days afterwards.

The biggest blip? A -35.4% price return 180 days after the iPhone 5 launch. That’s arguably due to Apple’s controversial decision to remove Google Maps and roll out its less reliable Apple Maps app — a move that riled up users and critics over inaccurate directions and incomplete mapping data.

Apple stock price returns following an iPhone launch
Apple stock price returns following an iPhone launch

Daryanani contended that there’s still more upside potential left for Apple’s stock with the launch of the 10th anniversary phone. His current price target is $180, which is about 12% higher than where Apple is currently trading.

In which case investors — not just consumers lusting after the latest iPhone — will have something to crow about.

—

JP Mangalindan is a senior correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.

More from JP: