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)