Friday, April 15, 2016

Fiscal 2Q 2016 Final Estimates


As of yesterday's market close of $112.10, AAPL is trading at a 11.0x multiple on my next-twelve-months EPS estimate (8.1x when excluding next-12m net cash and div).

Pared down FY16 iPhone estimates considerably to align with recent Apple guidance, but heeding management suggestion it's only a short-term dip for a couple of quarters, and rebound to flat/slight unit growth next year. End effect is revised fair value and 1y target to $132/146 (was $140/157).

Expect very aggressive buyback activity during last and current quarter of up to $18b/qtr, partly confirmed by $15.6b debt issuance last quarter. Expect buyback authorization raised to $175b from current $140b by next year with long term debt levels up to $100b from current $78b. Expect a quarterly dividend increase of 11.5% to 58 cents per share.


Detailed estimates:

3mo ending Mar-2016  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    52,050      -   2.00
Apple guide low       50,000   39.0   1.86*
Apple guide high      53,000   39.5   2.07*
Deagol estimates      53,373   39.9   2.11 (5.50b shares)

Saturday, January 16, 2016

Fiscal 1Q 2016 Final Estimates


As of Friday's market close of $97.13, AAPL is trading at a 9.1x multiple on my next-twelve-months EPS estimate (6.0x when excluding next-12m net cash and div).

On last quarter, $19b in net income says enough (details below). Looking forward, I'm revising my next 12-18 months valuation target from $164 to $157 due to lowered estimated revenue and EPS (FY16/17 by roughly 4/5%) mostly on iPhone (now flat/single-digit unit sell-through growth).

Promising guidance: Contrary to some recent sell-side reports, I believe iPhone channel inventories as of end of September were still at or near the lower end of the 5-7 weeks range of forward-looking demand. Another week of channel fill (representing 3-4m units spread through 1H16) would be appropriate, and even adding 6-7m would not breach the upper 7 week limit. This would support flat sell-through (any additional demand e.g. from rumored new 4" form factor would require even higher levels), allows for slight shipments growth, and provides upside to current quarter (F2Q16) recently lowered sell-side estimates in particular.

I expect management to act opportunistically on share buybacks during the current quarter, likely depleting the remaining ~$30b already authorized in the program before the end of the FY and requiring an expansion to be announced in April. However, beyond FY16 I'm not modeling more than what's needed to offset employee grants (mostly due to concerns/ignorance about comfortable long-term debt levels and foreign tax/repatriation political uncertainty), which also implies further potential upside to EPS beyond the current quarter's estimated strong guidance if a significant authorization is announced in April.


Detailed estimates:

3mo ending Dec-2015  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    76,760          3.24
Apple guide low       75,500   39.0   3.09*
Apple guide high      77,500   40.0   3.31*
Deagol estimates      78,464   40.4   3.39 (5.60b shares)

Monday, October 12, 2015

Fiscal 4Q 2015 Final Estimates


As of today's market close of $111.58, AAPL now trades at a 10.4x multiple on my next-twelve-months EPS estimate (7.4x excluding next-12m cash and div).

Slightly revised FY16 rev/EPS down by ~2/3% mostly on Watch. Still plenty of upside in next year consensus rev/EPS growth of 5/7% (I'm at 11/17%), while market pricing in flat or lower EPS despite further buybacks.


Detailed estimates:


3mo ending Sep-2015  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    51,060          1.88
Apple guide low       49,000   38.5   1.72*
Apple guide high      51,000   39.5   1.89*
Deagol estimates      51,902   39.6   1.94 (5.72b shares)


3mo ending Dec-2015  Rev($M)  GM(%)   EPS($)
-------------------  -------  -----   ------
Analysts consensus    76,930           3.20
Apple guide low (e)   74,000   39.0    2.98*
Apple guide high(e)   78,000   40.0    3.29*
Deagol estimates      78,167   40.0    3.29 (5.68b shares)

*EPS guidance ranges derived from other figures provided
 by Apple and diluted shares outstanding estimated by me


12m ending Sep-2016  Rev($M)  EPS($)
-------------------  -------  ------
Analysts consensus   245,140   9.79
Deagol estimates     260,245  10.72

Friday, July 10, 2015

Fiscal 3Q 2015 Final Estimates


As of today's market close of $123.28, AAPL now trades at a 11.7x multiple on my next-twelve-months EPS estimate (8.7x excluding next-12m cash and div).

Apple better start guiding a bit more realistically or analysts will start adding 10% to top of range from the outset no matter what. Beating by 5% revenue is ok but going back to Peter Oppenheimer's 15% (and 30% EPS) average sand-bagging is dangerous. (Game of guidance chicken as Mav likes to say. Hey Mav!)


Detailed estimates:

3mo ending Jun-2015  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    48,970          1.78
Apple guide low       46,000   38.5   1.57*
Apple guide high      48,000   39.5   1.74*
Deagol estimates      51,249   40.3   1.95 (5.78b shares)


3mo ending Sep-2015  Rev($M)  GM(%)   EPS($)
-------------------  -------  -----   ------
Analysts consensus    50,990           1.86
Apple guide low (e)   49,000   38.5    1.70*
Apple guide high(e)   52,000   39.5    1.92*
Deagol estimates      52,801   40.3    1.97 (5.74b shares)

*EPS guidance ranges derived from other figures provided
 by Apple and diluted shares outstanding estimated by me


12m ending Sep-2016  Rev($M)  EPS($)
-------------------  -------  ------
Analysts consensus   245,420   9.74
Deagol estimates     266,246  11.02

Monday, April 20, 2015

Fiscal 2Q 2015 Final Estimates


As of today's market open of $125.57, AAPL now trades at a 12.7x multiple on my next-twelve-months EPS estimate (10.0x excluding cash and next-12m div).

Refined my Apple Watch estimates but it still involves significant uncertainty. Guessing 21.75m units for the next 12 months at an ASP of $575 driving revenue of $12.5b for its first year, not including $1b from additional bands, accessories and Apple Care. Should roughly double in second year.

Expecting a dividend raise to 53 cents (+13% from 47¢) quarterly, and extension of the share repurchase program to a total $140-150b by end of calendar 2016 (currently at $90b by end of 2015).


Detailed estimates:

3mo ending Mar-2015  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    55,760          2.14
Apple guide low       52,000   38.5   1.88*
Apple guide high      55,000   39.5   2.11*
Deagol estimates      56,155   40.3   2.22 (5.83b shares)