Monday, July 17, 2017

Fiscal 3Q 2017 Final Estimates

As of Friday's market close of $149.04, AAPL is trading at a 14.8x multiple on my next-twelve-months EPS estimate (11.4x when excluding next-12m net cash and div).

I've not much to say that hasn't been said elsewhere. iPhone 7s/7s+/8/Pro/X is the obvious next catalyst, with an event in early Sep as always, 7s/7s+ available end of Sep and 8/Pro/whatever version available in Oct/Nov. Not going to delve into the arguments about potential changes due to new tech. But please do go and read all about it elsewhere.

US Dollar finally weakening should be a relief from last few years relentless FX headwinds, at least for Q4 guidance and Dec quarter. Beyond that it's anyone's guess given the shifting expectations on key US policies. Still not baking in anything regarding tax reform (both foreign and domestic) until a more definite timeline is provided by management. Comments last cc about "sometime this year" were likely a bit premature. Looks like a one-two 2018 story about iPhone supercycle and tax reform.

Fiscal 2019 consensus estimates for at least mid single-digits growth seem key for continued stock appreciation. Those will be publicly available in financial sites after Q4 gets reported (likely on Oct 31). Of course, Dec quarter guidance given that same day is immensely important, but everyone already knows this. Right? Ok. Just remember to also get a peek at 2019 estimates then, and allow a couple weeks for analysts' model updates to trickle through the data services and finally show up in the public sites. In fact, I'll repeat this paragraph verbatim when I post my current quarter estimates around mid-Oct.

Enjoy the Summer. Big, exciting Fall coming!


Detailed estimates:


3mo ending Jun-2017 Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    44,920      -   1.57
Apple guide low       43,500   37.5   1.45*
Apple guide high      45,500   38.5   1.61*
My estimates          45,455   38.6   1.62 (5.22b shares)

3mo ending Sep-2017  Rev($M)  GM(%)   EPS($)
-------------------  -------  -----   ------
Analysts consensus    50,230      -    1.86
Apple guide low (e)   48,000   37.5    1.69*
Apple guide high(e)   50,000   38.5    1.86*
My estimates          49,743   38.4    1.84 (5.17b shares)

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


12m ending Sep-2018  Rev($M)  EPS($)
-------------------  -------  ------
Analysts consensus   254,030   10.60
My estimates         253,785   10.65


Valuation (fwd-12mo from)  EPS($)   Y/Y  10x  Cash*  Div  Tot
-------------------------  ------  ----  ---  ----  ----  ---
Trailing       (Jul-2016)    8.74    2%   87    30  2.34  120
Fair Value     (Jul-2017)   10.38   19%  104    32  2.58  139
1yr Target     (Jul-2018)   10.98    6%  110    37  2.86  150

* Cash per share balance net of long-term debt
(click to enlarge)
F3Q17 Revenue breakdown:
iPhone    26,055 (41.00 × $635)
iPad       3,908 ( 9.25 × $423)
Mac        5,719 ( 4.35 × $1,315)
Services   7,194
Other      2,579 ( 2.6 × $389 = 1,012 Watch)

Income statement:
Revenue   45,455
COGS     (27,931)
GM        17,524  38.6%

OpEx     ( 6,662)
OpInc     10,893  23.9%

OIE          461
Pre-tax   11,324

Tax      ( 2,888) 25.5%
NetInc     8,436  18.6%

Shares     5,216
EPS        $1.62

(amounts in millions except $ASP, $EPS, and ratios%)

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