With Apple (AAPL) set to release second-quarter earnings after the bell, analysts remain bullish on the iPhone maker’s future -- while striking a cautious tone ahead of a report that has investors bracing for disappointment.

The bears in recent months have grabbed a hold of Apple’s stock, which fell to a new 52-week low of $385.10 last Friday, well below a high of $705.07 in September. Shares were up 1.8% at $405.75 early Tuesday afternoon.

The stock’s freefall has indicated a shift in sentiment surrounding the Cupertino, Calif.-based tech giant, as a combination of slowing growth and increased competition from Samsung Electronics, Google (GOOG) and Microsoft (MSFT) scared investors away.

And several analysts have lowered expectations for Apple’s results, due out after Tuesday’s closing bell, in the wake of weaker iPhone and iPad demand.

Analysts polled by Thomson Reuters expect Apple will report quarterly results of $9.98 a share on revenue of $42.3 billion. That would reflect an 18% decline from a year ago and the first time Apple's quarterly results fell in 10 years.

However, despite what is expected to be a disappointing earnings report, analysts are largely bullish as they keep an eye on anticipated product launches that may give Apple the boost it needs.

Out of 54 analyst recommendations, 48 have Apple at a strong buy or buy. Four others rate Apple a hold, and only two rate the stock at underperform or sell.

BGC tech analyst Colin Gillis on Monday upgraded Apple to a buy from hold, while at the same time lowering his price target to $500 from $550. Most of the negativity surrounding Apple is already baked into the stock, he wrote in a research note to clients, and the next round of Apple products due out later this year should provide a source of optimism.

There are still structural changes in the market, Gillis explained, and the stock’s near-term movement will largely depend on to what extent current estimates are baked into Apple shares. He said the stock is cheap on a price-to-earnings basis, but perhaps the earnings number is wrong.

“That ‘E’ number could be significantly off because of market changes,” Gillis said. “But on a valuation basis, it’s still the second-largest company on the market.”

He suggested improved margins could give the stock a boost. Apple provided guidance for gross margins to fall between 37.5% and 38.5%, well below last year’s 47.4%.

“More leverage on pricing could get people excited,” Gillis said.

Other analysts are also holding onto a bullish view. Deutsche Bank’s Chris Whitmore reaffirmed a buy rating on Apple shares and urged a longer-term outlook based on upcoming product launches.

“Although we doubt this quarter will be a meaningful catalyst for the stock, we recommend owning Apple for the reacceleration of its product cycle refreshes in the second half of 2013 (iPhone 5S, low-end iPhone, iPad etc),” Whitmore wrote in a research note.

Gillis also noted that the weakness in Apple shares provides an opportunity to buy into the stock, even though projections for iPhone and iPad sales are on the decline.

“The smartphone market is still the best in the world, and Apple should be able to react to cheaper phones,” he said.

Meanwhile, hedge fund activist David Einhorn and Apple shareholders have called for the tech giant to return some of its approximately $137 billion in cash to investors, and Apple has yet to indicate if it plans to dole out some of that cash or use it elsewhere.

“I don’t think they’re going to burn it,” Gillis said of Apple’s cash, “but they should deploy it more. You can’t let it sit there and keep piling it up.”

Gillis added that there are “plenty of areas to improve on,” including social media and cloud services. Apple should use the cash or return it to shareholders, he said.

Follow Matthew Rocco on Twitter @MatthewRocco