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($) ------------------- ------- ----- ------ Analysts consensus 52,050 - 2.00 Apple guide low 50,000 39.0 1.86* Apple guide high 53,000 39.5 2.07* Deagol estimates 53,373 39.9 2.11 (5.50b shares) 3mo ending Jun-2016 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 47,540 - 1.77 Apple guide low (e) 46,000 38.5 1.67* Apple guide high(e) 49,000 39.5 1.91* Deagol estimates 49,836 39.3 1.94 (5.34b shares) *EPS guidance ranges derived from other figures provided by Apple and diluted shares outstanding estimated by me 12m ending Sep-2016 Rev($M) EPS($) ------------------- ------- ------ Analysts consensus 227,020 9.05 Deagol estimates 235,021 9.66 Valuation (fwd-12mo from) EPS($) Y/Y 10x Cash* Div Tot ------------------------- ------ --- --- ---- ---- --- Trailing (Apr-2015) 9.20 14% 92 26 2.08 120 Fair value (Apr-2016) 10.17 11% 102 28 2.32 132 1yr target (Apr-2017) 10.85 7% 109 35 2.56 146 * Cash per share balance net of long-term debt
(click to enlarge)
F2Q16 Revenue breakdown: iPhone 34,658 (52.0 × $666) iPad 4,784 (10.5 × $456) Mac 5,637 ( 4.5 × $1,253) Services 5,541 Other 2,754 ( 2.5 × $431 = 1,078 Watch) Income statement: Revenue 53,373 COGS 32,066 GM 21,307 39.9% OpEx 6,045 OpInc 15,262 28.6% OIE 333 Pre-tax 15,595 Tax 3,977 25.5% NetInc 11,618 21.8% Shares 5,499 EPS($) 2.11 (amounts in millions except $ASP, $EPS, and %ratios)
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3 comments:
A huge miss after many years. Are you going to update based on Apple's updated guidance (about 20% less than your estimates for next quarter)?
Yes, of course I'll update (closer to -15% from where I was in revs). More critical will be how I revise the projection for the next couple of years and beyond.
I'm interested in the revised numbers, too
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