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)
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