Fiscal 3Q 2019 Final Estimates

As of today's close of $204.50, AAPL is trading at a 15.5x multiple on my next-twelve-months EPS estimate (14.0x when excluding NTM net cash and dividends).

Don't get fooled by the most boring quarters, like, ever. Another consecutive "no collapse" quarter is good, means last Q1 adjustments worked. Not sure why WS sees 3% rev decline in Sep after flat or slight growth in June, in any case, strong Q4 guidance may surprise (but no earns growth until Q1).

Emphasis on intriguing longer-term themes is great. Key behind-the-scenes platform and business model shifts, happening almost in slow-motion, into new services and broader ecosystem relationships eventually will have huge effects on long-term fundamentals, but ironically will be hard to notice for some time and confound most pundits.

Also hard to explain, so I'll leave it at that.


Detailed estimates:

3mo ending Jun19  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   53.4     -  2.10
Apple guide low    52.5  37.0  2.00*
Apple guide high   54.5  38.0  2.21*
My estimates       53.8  37.8  2.15 (4.59b shares)


3mo ending Sep19  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   61.2     -  2.69
Apple gde lo (e)   61.0  38.0  2.70*
Apple gde hi (e)   63.0  38.5  2.88*
My estimates       62.8  38.3  2.85 (4.50b shares)

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


12m ending Sep20  Rev$B   $EPS
----------------  -----  -----
Analysts consens  268.2  12.62
My estimates      275.7  13.56


Valuation
Timeframe  NTMfrom   $EPS  Y/Y   Mult  Val  $*   Div  Tot
---------  -------  -----  ---  -----  ---  --  ----  ---
Trail Val  Jul2018  11.70   6%  11.25  132  21  2.96  156
 Fair Val  Jul2019  13.20  13%  12.25  162  17  3.16  181
1y Target  Jul2020  14.74  12%  13.11  193  12  3.50  209

*Cash per share balance net of debt and commercial paper

(click to enlarge)
Statements of Operations

Revenues  F3Q19e  F3Q18*   Y/Y%
--------  ------  ------  -----
iPhone    24,908  29,470  -15.5
Mac        6,050   5,258   15.1
iPad       5,506   4,634   18.8
W/H/A      5,359   3,733   43.6
--------  ------  ------  -----
Products  41,822  43,095   -3.0
Services  11,971  10,170   17.7
--------  ------  ------  -----
Tot Revs  53,793  53,265    1.0

Gross Margin Breakdown (est)
--------  ------  ------  -----
Products  12,688  14,325  -11.4
Services   7,630   6,096   25.2
--------  ------  ------  -----
Tot GM    20,318  20,421*  -0.5
--------  ------  ------  -----
Prod GM%   30.3%   33.2%   -2.9
Svcs GM%   63.7%   59.9%    3.8
--------  ------  ------  -----
Tot GM%    37.8%   38.3%   -0.6

Op Expns   8,750   7,809   12.0
--------  ------  ------  -----
OpIncome  11,569  12,612   -8.3
Op Mrgn%   21.5%   23.7%   -2.2

OIE          250     672  -62.8
--------  ------  ------  -----
Pre-Tax   11,819  13,284  -11.0

Tax Rate   16.5%   13.3%    3.2
Tax Prov   1,950   1,765   10.5
--------  ------  ------  -----
Net Incm   9,868  11,519  -14.3
Net Mrg%   18.3%   21.6%   -3.3

Dil Shrs   4,593   4,927   -6.8
--------  ------  ------  -----
EPS        $2.15   $2.34   -8.1

Amounts in millions except EPS in dollars and ratios in %
* F3Q18 actual as reported except Gross Margin Breakdown