Wednesday, October 12, 2016

Fiscal 4Q 2016 Final Estimates


As of today's market open of $117.35, AAPL is trading at a 12.6x multiple on my next-twelve-months EPS estimate (9.3x when excluding next-12m net cash and div).

Upped FY 2017 due to better than expected response to Plus cameras and Jet Black finish, as well as even more switchers defecting from Samsung than normal. Intrigued about Watch strategy, and hope sales figures get revealed at some point next year. Also curious about what kind of repatriation tax deal is almost assured next year, as "signaled" by Tim Cook.

The stock is approaching fair valuation but current one-year target has significant upside due to FY 2018 growth potential from iPhone, Watch, and Services, and cash repatriation/capital return options (all factors modeled rather conservatively for now).


Detailed estimates:


3mo ending Sep-2016  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    46,800      -   1.65
Apple guide low       45,500   37.5   1.56*
Apple guide high      47,500   38.0   1.71*
My estimates          47,522   38.2   1.71 (5.39b shares)

Tuesday, July 19, 2016

Fiscal 3Q 2016 Final Estimates

As of yesterday's market close of $99.83, AAPL is trading at a 11.3x multiple on my next-twelve-months EPS estimate (7.8x when excluding next-12m net cash and div).

Not much to say. I expect a return to flat/growth by 1H next year, so forward valuation already on the rebound. Market discount of 15-20% (to my current fair value, but ~50% to broader market multiples) implies investors likely expect no meaningful rebound within next 2-3 years and significantly discount the cash and equivalents mostly parked abroad.

For the current quarter I do expect a bigger impact from iPhone SE, driving higher revenue but lower margins, recovering next quarter.


Detailed estimates:

3mo ending Jun-2016  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    42,010      -   1.38
Apple guide low       41,000   37.5   1.31*
Apple guide high      43,000   38.0   1.45*
My estimates          43,354   37.9   1.46 (5.46b shares)

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)