Monday, April 22, 2019

Fiscal 2Q 2019 Final Estimates


As of Friday's close of $203.86, AAPL is trading at a 15.5x multiple on my next-twelve-months EPS estimate (14.3x when excluding NTM net cash and dividends).


Highlights:

iPhone rev -15%/+2% annual growth in FY 19/20, low single digits thereafter.
Non-iPhone rev +16%/+10% annual growth in FY 19/20, high single digits thereafter.
Total rev -3%/+5% annual growth in FY 19/20, mid single digits thereafter.
Net income -9%/+7% annual growth in FY 19/20, mid single digits thereafter.
Quarterly dividend raised to 81/91 cents (+11%/+12%) in April 19/20.
Buybacks of $49b/$21b for FQ2/FQ3 ($63b authorized up to last Q).
$75b buyback authorization expansion, $80b buyback over 1y ending March 2020.
$65b buyback 1y ending March 2021, approximately $50b/y thereafter.


Detailed estimates:


3mo ending Mar19  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   57.4     -  2.36
Apple guide low    55.0  37.0  2.18*
Apple guide high   59.0  38.0  2.54*
My estimates       57.7  37.8  2.45 (4.62b shares)


3mo ending Jun19  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   51.9     -  2.08
Apple gde lo (e)   51.0  38.0  2.12*
Apple gde hi (e)   53.0  38.5  2.30*
My estimates       52.5  38.3  2.26 (4.43b shares)

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


12m ending Sep19  Rev$B   $EPS
----------------  -----  -----
Analysts consens  255.0  11.38
My estimates      257.0  11.91


Valuation
Timeframe  NTMfrom   $EPS  Y/Y  Mult  Val  $*   Div  Tot
---------  -------  -----  ---  ----  ---  --  ----  ---
Trail Val  Apr2018  11.88  15%  11.0  131  20  2.92  154
 Fair Val  Apr2019  13.15  11%  12.0  158  12  3.24  173
1y Target  Apr2020  14.87  13%  12.9  192   6  3.64  202

*Cash per share balance net of debt and commercial paper

(click to enlarge)
Statements of Operations Revenues F2Q19e F2Q18* Y/Y% -------- ------ ------ ----- iPhone 30,722 37,559 -18.2 Mac 5,846 5,776 1.2 iPad 4,455 4,008 11.1 W/H/A 5,260 3,944 33.4 -------- ------ ------ ----- Products 46,284 51,287 -9.8 Services 11,403 9,850 15.8 -------- ------ ------ ----- Tot Revs 57,687 61,137 -5.6 Gross Margin Breakdown (est) -------- ------ ------ ----- Products 14,919 17,606 -15.3 Services 6,913 5,816 18.9 -------- ------ ------ ----- Tot GM 21,831 23,422* -6.8 -------- ------ ------ ----- Prod GM% 32.2% 34.3% -2.1 Svcs GM% 60.6% 59.0% 1.6 -------- ------ ------ ----- Tot GM% 37.8% 38.3%* -0.5 Op Expns 8,534 7,528 13.4 -------- ------ ------ ----- OpIncome 13,297 15,894 -16.3 Op Mrgn% 23.1% 26.0% -2.9 OIE 330 274 20.3 -------- ------ ------ ----- Pre-Tax 13,627 16,168 -15.7 Tax Rate 17.0% 14.5% 2.5 Tax Prov 2,317 2,346 -1.3 -------- ------ ------ ----- Net Incm 11,310 13,822 -18.2 Net Mrg% 19.6% 22.6% -3.0 Dil Shrs 4,617 5,068 -8.9 -------- ------ ------ ----- EPS $2.45 $2.73 -10.2 Amounts in millions except EPS in dollars and ratios in % * actual as reported except Gross Margin Breakdown (est)

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