Here's how Apple's stock performs after new iPhone events

Published Mon, Oct 12 202010:46 AM EDTUpdated Mon, Oct 12 202012:48 PM EDT

Apple is kicking off its product launch on Tuesday, and if history is any gauge, this could be a good time to buy the technology giant's stock. Apple shares have outperformed the S & P 500 by an average of 13 percentage points in the six months following an iPhone launch event, according to data compiled by Morgan Stanley. Apple's long awaited iPhone launch — which was pushed to October due to Covid-19 — happens on Tuesday. It will be "the most significant iPhone event in years," Morgan Stanley's Katy Huberty told clients. Apple is expected to include the first major iPhone exterior redesign since 2017 and is believed to release four separate iPhones at different screen sizes and prices. "These 4 new models will accompany the 2nd generation iPhone SE launched in spring 2020 to comprise Apple's most complete lineup of new iPhones ever," Huberty added. Most notably, Apple is expected to release new iPhones with 5G cellular networks, which touts faster download times. Many on Wall Street believe the event's name "Hi, Speed" is a sign of the launch of 5G. "The name certainly hints at the long-awaited 5G speeds the next-generation of iPhones are expected to provide, and it appears that this event in contrast to the one held last month will be more iPhone-focused," Deutsche Bank analyst Jeriel Ong told clients. Morgan Stanley looked at Apple's stock performance following iPhone launches back to the iPhone 6. Only two times have Apple shares been lower six months after an iPhone event, the firm said. The five other events have spurred Apple's stock to rally in the months following. The historical data shows that Apple's iPhone events are pretty reliable buying opportunities, especially with a new type of iPhone. "We remain buyers of Apple shares ahead of the event and anticipate strong global iPhone demand to drive positive earnings revisions and stock outperformance throughout FY21," said Huberty. Short-term weakness? Sometimes surrounding Apple media events there is the sell-the-news effect with Apple's stock in the red the day and week of the event. Hedge fund analytics tool Kensho data shows Apple shares are down on average for the day and week of a media event, but the stock bounces back. On average, Apple's stock is 10.7% higher three months after the event. Ong mentioned that the delayed event only gives Apple about a week of new iPhone sales data to provide on its Oct. 29 earnings. "Since the pandemic began, AAPL has elected not to provide guidance, and we wonder whether they will continue to omit quarterly guidance as a result of the delayed iPhone launch and the subsequent lack of visibility they have in forecasting," said Ong. The Apple event starts at 1 p.m. ET on Tuesday . — with reporting from CNBC's Michael Bloom and Crystal Mercedes. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Tim Cook, chief executive officer of Apple Inc., speaks about the new iPhone Pro during an event at the Steve Jobs Theater in Cupertino, California, U.S., on Tuesday, Sept. 10, 2019. Apple unveiled the iPhone 11 that will replace the XR and start at $699. Photographer: David Paul Morris/Bloomberg via Getty Images

David Paul Morris | Bloomberg | Getty Images

Apple is kicking off its product launch on Tuesday, and if history is any gauge, this could be a good time to buy the technology giant's stock.

Apple shares have outperformed the S&P 500 by an average of 13 percentage points in the six months following an iPhone launch event, according to data compiled by Morgan Stanley.