On the present value of $369.77, AAPL is buying and selling at a 24.1x a number of on my FY21 EPS estimate (23.1x when excluding FY21 internet money and dividends).
As soon as once more I do not really feel comfy publishing my detailed guesses for final quarter’s numbers and product income breakdown. Hopefully I am going to be capable of share these particulars for the subsequent report, as I count on Apple to renew offering quarterly steering subsequent week.
On valuation, I’ve prolonged the projected a number of growth, now going to 20x (was 18x) over the subsequent 2-3 years. The numerous enhance in buybacks since 2018 is among the most essential (although seldom mentioned) drivers of the valuation growth. Nonetheless, after the subsequent couple of years the money stability will attain inside $50b of the acknowledged objective of being “internet money impartial over time” which implies the buyback tempo might want to decelerate a bit to stay sustainable, on account of money flows barely restrained by doubtlessly larger taxes and a few extra tax liabilities coming due in 2023-26.
The one approach to keep the present buyback tempo can be by way of considerably quicker development of money from operations than I am at present projecting for the subsequent few years. Moreover, given the present inventory value, buybacks can now not obtain the identical vastly impactful leverage impact as when the inventory was considerably undervalued, usually at half-priced reductions. So a a number of stabilizing round 20x for the foreseeable future appears applicable at no cost money movement development slowing into the mid-single-digits after the subsequent 2-3 years.
This is just some particular estimates I can share:
3mo ending Jun20 Rev$B GM% $EPS
---------------- ----- ---- ----
Analysts consens 51.8 - 2.03
My estimates - 38.7 - (4.34b shares)
3mo ending Sep20 Rev$B GM% $EPS
---------------- ----- ---- ----
Analysts consens 62.0 - 2.80
My estimates - 38.6 - (4.29b shares)
12m ending Sep21 Rev$B $EPS
---------------- ----- -----
Analysts consens 297.4 14.94
My estimates 306.3 15.33
Valuation
Timeframe NTMfrom $EPS Y/Y Mult Val $* Div Tot
--------- ------- ----- --- ---- --- -- ---- ---
Path Val Jul2019 12.82 9% 13.3 170 17 3.13 190
Truthful Val Jul2020 14.81 15% 16.9 250 14 3.36 267
1y Goal Jul2021 16.58 12% 19.2 318 12 3.67 333
2y Worth! Jul2022 18.24 10% 19.8 361 10 3.98 375
*Money per share stability internet of debt and industrial paper
(click on to enlarge)
