As of Friday’s shut of $236.41, AAPL is buying and selling at a 17.8x a number of on my next-twelve-months EPS estimate (16.2x when excluding NTM web money and dividends).
After a quick panic early this yr, market is again at previous-2-years-or-so pattern of wanting forward a few years and pricing in expectations of mid-high single digit progress, largely pushed by extra environment friendly steadiness sheet and narrative shift to companies—even when new ones will take a number of years to bear fruit—and in opposition to loud noise from commerce and threats of regulation. This has allowed for a valuation progressively inching as much as broad market multiples for the primary time in a minimum of 12 years.
Given this progressively extra optimistic (or moderately much less damaging) sentiment I am extending my valuation a number of growth in direction of 15x (was aiming for 14x) forward-looking EPS plus web money and dividends over the subsequent 3-5 years. At present at simply 12.5x up from 10x 2.5 years in the past, and one level per yr growth fee starting to decelerate after subsequent yr.
Consideration to mainstream person wants is a good tactical transfer on this pre-5G cycle: pictures, battery life, pace, and value will promote extra iPhones. Free unique content material is only a good perk for now however finally a powerful strategic benefit if they’ve successful or two.
Detailed estimates:
3mo ending Sep19 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 62.9 - 2.83 Apple information low 61.0 37.5 2.66* Apple information excessive 64.0 38.5 2.96* My estimates 63.8 38.3 2.93 (4.52b shares) 3mo ending Dec19 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 87.3 - 4.44 Apple gde lo (e) 85.0 37.5 4.26* Apple gde hello (e) 89.0 38.0 4.61* My estimates 87.6 37.9 4.50 (4.45b shares) *EPS steering ranges derived from different figures offered by Apple and diluted shares excellent estimated by me 12m ending Sep20 Rev$B $EPS ---------------- ----- ----- Analysts consens 271.0 12.76 My estimates 274.3 13.31 Valuation Timeframe NTMfrom $EPS Y/Y Mult Val $* Div Tot --------- ------- ----- --- ----- --- -- ---- --- Path Val Oct2018 11.76 -1% 11.50 135 21 3.00 159 Honest Val Oct2019 13.31 13% 12.50 166 17 3.24 187 1y Goal Oct2020 15.09 13% 13.45 203 14 3.60 221 *Money per share steadiness web of debt and business paper(click on to enlarge)
F4Q19 Statements of Operations Revenues F4Q19e F4Q18* Y/Y% -------- ------ ------ ----- iPhone 33,676 36,755 -8.4 Mac 7,759 7,340 5.7 iPad 4,627 3,983 16.2 W/H/A 5,672 4,223 34.3 -------- ------ ------ ----- Merchandise 51,734 52,301 -1.1 Companies 12,069 10,599 13.9 -------- ------ ------ ----- Tot Revs 63,804 62,900 1.4 Gross Margin Breakdown (est) -------- ------ ------ ----- Merchandise 16,535 17,505 -5.5 Companies 7,880 6,579 19.8 -------- ------ ------ ----- Tot GM 24,415 24,084* 1.4 -------- ------ ------ ----- Prod GM% 32.0% 33.5% -1.5 Svcs GM% 65.3% 62.1% 3.2 -------- ------ ------ ----- Tot GM% 38.3% 38.3% 0.0 Op Expns 8,772 7,966 10.1 -------- ------ ------ ----- OpIncome 15,643 16,118 -2.9 Op Mrgn% 24.5% 25.6% -1.1 OIE 216 303 -28.8 -------- ------ ------ ----- Pre-Tax 15,859 16,421 -3.4 Tax Charge 16.5% 14.0% 2.5 Tax Prov 2,617 2,296 14.0 -------- ------ ------ ----- Web Incm 13,242 14,125 -6.2 Web Mrg% 20.8% 22.5% -1.7 Dil Shrs 4,519 4,848 -6.8 -------- ------ ------ ----- EPS $2.93 $2.91 0.6 Quantities in hundreds of thousands besides EPS in {dollars} and ratios in % * F4Q18 precise as reported besides Gross Margin Breakdown
