As of yesterday’s market shut of $174.22, AAPL is buying and selling at a 14.1x a number of on my next-twelve-months EPS estimate (11.7x when excluding next-12m web money and div).
On tax reform results, Apple appears to have provisioned previous international taxes very presciently because the $38b it introduced can pay (presumed over 5 years although laws permit it over 8 years) could be very a lot in keeping with the international tax deferred legal responsibility they’d have as of December (was $36b as of September). On the going-forward efficient price, I am modeling a gradual decline from 22% (present quarter) to about 20% in a yr, however I can see it happening to 18% relying on many notably complicated particulars of the brand new tax remedy for international revenue.
As for what to do with all of the freed-up money, apart from elevated R&D and capital spending (principally already in my mannequin) I am going with a dividend per share enhance of 16% subsequent April and about 20% per yr for the next 3 years (raised it 10.5% final yr) primarily doubling the present per share quantity by 2021 and attaining a 2% yield on my inventory value projection. As well as, I mannequin a $110b enhance ($35b base annual enhance and $75b because of tax reform) to the share repurchase program to a complete of $320b via March 2020 (was $210b via March 2019). Assuming my inventory value forecast is not too far off from actuality, this would cut back the shares excellent after the following 3 years to about 4.3b shares, and would restrict the incremental complete dividend value to Apple to solely about $5b over 3 years (ttm value is $12.8b).
On iPhone cycle and all the opposite merchandise enterprise, appears my experiment final September of taking a shot at it effectively earlier than all of it went down was moderately succesful, as my guesses had been fairly good, notably steerage. So no main modifications to the elemental enterprise foundation for the mannequin apart from one other bump to ASPs. Be ready to see many pundits dismissing all of 2018 positives as mere monetary engineering, and an intensification of the already schizophrenic negativity for the following cycle.
Detailed estimates:
3mo ending Dec-2017 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 86,750 - 3.80 Apple information low 84,000 38.0 3.61* Apple information excessive 87,000 38.5 3.82* My estimates 87,358 38.8 3.98 (5.14b shares) 3mo ending Mar-2018 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 67,677 - 2.90 Apple information low (e) 62,000 38.0 2.59* Apple information excessive(e) 64,000 39.0 2.79* My estimates 64,232 39.1 2.82 (5.08b shares) *EPS steerage ranges derived from different figures supplied by Apple and diluted shares excellent estimated by me 12m ending Sep-2018 Rev($M) EPS($) ------------------- ------- ------ Analysts consensus 273,147 11.49 My estimates 266,117 11.65 Valuation (fwd-12mo from) EPS($) Y/Y 10x Money* Div Tot ------------------------- ------ ---- --- ---- ---- --- Trailing (Jan-2017) 9.81 17% 98 31 2.46 132 Honest Worth (Jan-2018) 12.36 26% 124 27 2.82 154 1yr Goal (Jan-2019) 13.86 12% 139 29 3.37 171 * Money per share steadiness web of long-term debt(click on to enlarge)
F1Q18 Income breakdown: iPhone 60,334 (83.0 × $727) iPad 6,190 (14.0 × $442) Mac 7,262 ( 5.5 × $1,320) Companies 8,419 Different 5,152 ( 7.5 × $385 = 2,884 Watch) Revenue assertion: Income 87,358 COGS (53,501) GM 33,856 38.8% OpEx (7,739) OpInc 26,117 29.9% OIE 624 Pre-tax 26,741 Tax (6,284) 23.5% NetInc 20,457 23.4% Shares 5,138 EPS $3.98 (quantities in thousands and thousands besides $ASP, $EPS, and ratios%)
