Monday, January 24, 2022

Fiscal 1Q 2022 Final Estimates

As of today's current price of $156.05, AAPL trades at a 23.4x multiple on my NTM EPS estimate (22.7x when excluding NTM net cash and dividends).

Consensus growth estimates for FY22 have improved slightly, but still remain well below my estimates. I'm at +11/15% while consensus is 4.5/2.4% rev/EPS growth for the Fiscal Year. The fact that consensus EPS growth is slower than revenue growth proves those are flawed estimates not reflecting the significant leverage from rising gross margins and about 3% lower share count.

Given the market's recent nervousness as well as last report's inline results, I've decided to leave the long-term target valuation multiple at 23x for now. If my March quarter estimates align with whatever guidance clues are provided, then I most likely will raise the multiple to 24x next time, with still one more nudge to 25x hopefully later this year. I'll leave the discussion of potentially huge upside from new product categories to other analysts, but the effect on financials will be gradual over the next 3-5 years, and not felt this year at all. However, investors should anticipate such effects and most likely bring back the trailing multiple up above 30with the stock breaking $200 well ahead of any announcement.


Detailed estimates:


3mo ending Dec21  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens  118.4     -  1.89
My estimates      121.3  42.2  1.98 (16.54b shares)


3mo ending Mar22  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   90.7     -  1.33
Apple gde lo (e)   94.0  42.0  1.43*
Apple gde hi (e)   98.0  43.0  1.56*
My estimates       98.4  42.9  1.58 (16.42b shares)

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


12m ending Sep22  Rev$B  $EPS
----------------  -----  ----
Analysts consens  382.3  5.74
My estimates      406.6  6.45


Valuation
Timeframe  NTMfrom  $EPS  Y/Y  Mult  Val   $*   Div  Tot
---------  -------  ----  ---  ----  ---  ---  ----  ---
Trail Val  Jan2021  5.91  60%  19.0  112  4.4  0.87  117
Frwrd Val  Jan2022  6.68  13%  21.8  146  3.4  0.97  150
1y Target  Jan2023  7.45  12%  22.7  169  2.3  1.15  173
2y Value!  Jan2024  8.22  10%  22.9  189  1.3  1.44  191

*Cash per share balance net of debt and commercial paper

(click to enlarge)

F1Q22 Statements of Operations Revenues F1Q22e F1Q21 Y/Y% -------- ------- ------- ----- iPhone 69,989 65,597 6.7 Mac 9,770 8,675 12.6 iPad 8,323 8,435 -1.3 W/H/A 14,560 12,971 12.2 -------- ------- ------- ----- Products 102,642 95,678 7.3 Services 18,676 15,761 18.5 -------- ------- ------- ----- Tot Revs 121,317 111,439 8.9 Gross Margin Breakdown -------- ------- ------- ----- Products 37,963 33,548 13.2 Services 13,176 10,780 22.2 -------- ------- ------- ----- Tot GM 51,139 44,328 15.4 -------- ------- ------- ----- Prod GM% 37.0% 35.1% 1.9 Svcs GM% 70.5% 68.4% 2.2 -------- ------- ------- ----- Tot GM% 42.2% 39.8% 2.4 Op Expns 12,473 10,794 15.6 -------- ------- ------- ----- OpIncome 38,666 33,534 15.3 Op Mrgn% 31.9% 30.1% 1.8 OIE -251 45 - -------- ------- ------- ----- Pre-Tax 38,415 33,579 14.4 Tax Rate 14.8% 14.4% 0.4 Tax Prov 5,666 4,824 17.5 -------- ------- ------- ----- Net Incm 32,748 28,755 13.9 Net Mrg% 27.0% 25.8% 1.2 Dil Shrs 16,541 17,114 -3.3 -------- ------- ------- ----- EPS $1.98 $1.68 17.8 Amounts in millions except EPS in dollars and ratios in %

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