As of at the moment’s market shut of $143.64, AAPL is buying and selling at a 13.8x a number of on my next-twelve-months EPS estimate (10.5x when excluding next-12m web money and div).
For the primary time ever I’ve determined to “collar” ($140-145) a minimum of half of my AAPL place on condition that it is buying and selling above my FV and never too removed from my 12-month goal, however largely as a result of it represents over 80% of my portfolio, so that is the very best alternative I can see for me to diversify. I might nonetheless stay vastly obese with roughly a 40% AAPL weight (whereas AAPL simply 3.5% of the S&P). The one downside is I don’t know what to do with the proceeds, and probably would find yourself reinvesting in AAPL on pullbacks. A lot for attempting to diversify. That is by no means supposed as funding recommendation for anybody, only a disclosure of my choice. Please do your individual due diligence.
I count on a further $35-40b buyback authorization prolonged one other yr to March 2019, and a 9% improve to the quarterly dividend to 62 cents. Nonetheless no approach for me to confidently mannequin any repatriation plans. Most certainly there’d be an enormous one-time tax achieve which might should be excluded from trailing EPS, so I see no straightforward approach to get this occasion to have an effect on my valuation mannequin. In actuality, it impacts the market’s notion of the worth of the trapped offshore money, however as a result of I absolutely exclude it (web money valued at 100%) in my mannequin, it solely exhibits up as a detrimental (the money hit as a result of precise repat tax paid). Take into account this a type of built-in conservativeness in my mannequin. Or a flaw, in the event you want. Possibly I will determine one thing out when it occurs. What would positively have an effect on my valuation is a everlasting discount of the company tax price, however once more, not going to invest how a lot decrease or when it would occur. We’ll have to attend and see the way it all pans out.
Subsequent yr or two projections are on fairly customary assumptions, simply barely above WS analysts consensus. I might be way more assured on this complete “supercycle” principle if it weren’t so hyped by now. I are likely to turn out to be a bit skeptic after I see this type of unoriginal evaluation and groupthink in WS and tech media. Cannot stand the way in which everybody hangs all of it on the by no means ending rumor mill. At this level I simply wish to fast-forward to October and January and get it throughout with. Not asking a lot, simply present me a minimum of excessive single-digit income development and regular margins subsequent yr and I will be glad. One factor price mentioning is the newly found Providers development narrative (but double-digit development’s been there ceaselessly). Even when it simply compensates for different merchandise declines (e.g. iPad) it is a huge constructive because it replaces decrease margin with larger margin revenues. Having stated that, iPhone remains to be “it” for now, when it comes to significant development.
Detailed estimates: 3mo ending Mar-2017 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 52,970 - 2.02 Apple information low 51,500 38.0 1.90* Apple information excessive 53,500 39.0 2.07* My estimates 53,689 39.0 2.09 (5.24b shares) 3mo ending Jun-2017 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 45,610 - 1.62 Apple information low (e) 44,000 38.5 1.55* Apple information excessive(e) 46,000 39.5 1.71* My estimates 46,387 39.5 1.74 (5.17b shares) *EPS steering ranges derived from different figures supplied by Apple and diluted shares excellent estimated by me 12m ending Sep-2017 Rev($M) EPS($) ------------------- ------- ------ Analysts consensus 228,600 8.96 My estimates 230,904 9.28 Valuation (fwd-12mo from) EPS($) Y/Y 10x Money* Div Tot ------------------------- ------ ---- --- ---- ---- --- Trailing (Apr-2016) 8.54 -5% 85 29 2.28 117 Truthful Worth (Apr-2017) 10.39 22% 104 32 2.48 138 1yr Goal (Apr-2018) 11.04 6% 110 37 2.64 150 * Money per share steadiness web of long-term debt
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F2Q17 Income breakdown: iPhone 34,594 (52.0 × $665) iPad 3,491 ( 8.5 × $411) Mac 5,669 ( 4.3 × $1,318) Providers 7,332 Different 2,603 ( 3.0 × $395 = 1,185 Watch) Revenue assertion: Income 53,689 COGS (32,775) GM 20,914 39.0% OpEx ( 6,538) OpInc 14,376 26.8% OIE 438 Pre-tax 14,814 Tax ( 3,852) 26.0% NetInc 10,963 20.4% Shares 5,240 EPS $2.09 (quantities in hundreds of thousands besides $ASP, $EPS, and ratios%)
