As of Friday’s shut of $148.69, AAPL trades at a 23.2x a number of on my NTM EPS estimate (22.6x when excluding NTM web money and dividends).
Market continues to disregard previous scorching progress efficiency in worry of getting seen demand pull-forward so subsequent stagnation or declines should be proper across the nook. A slowdown from final 12 months’s progress is inevitable, however removed from stagnation given the nonetheless incipient adoption of the most recent drivers (5G, Apple Silicon, new Providers) by the billion-plus person base.
Persistent industry-wide element shortages doubtlessly stretching into subsequent 12 months suggests demand stays sturdy, however in some way nonetheless supplies one more “flawless flawgic” catch-22 for naysayers: both demand evaporates as individuals already acquired their tech repair, or will probably be sturdy however cannot meet it on account of shortages. This in tandem with the drained risk of regulation punishing any and all success, or the inane taper tantrums as if damaging actual charges offered a horny incentive for merchants hooked on progress, offers good and affected person traders a fantastic alternative (wait, no, not crypto).
So the inventory is caught in a rut; the extra progress Apple posts the more serious the doom will get trying ahead, a minimum of till we get previous these foolish compares and the provision and political handwringing narratives die out (yeah proper). Extra seemingly, finally Apple reveals over the following few quarters it will possibly nonetheless develop sustainably and for the long-term, it retains printing money seemingly sooner than the Fed, retains retiring shares and elevating the dividend (just a bit bit sooner please attempt getting again to 1% yield), and traders are simply compelled, kicking and screaming, to take their higher-priced medication.
In mild of this seemingly being the final quarter of blistering progress (EPS +77%, +74% LTM), and benefiting from the wariness of the market, I am going to eagerly resume nudging up the projected sustainable valuation a number of, now from 22x to 23x, but nonetheless leaving some room for growth over the following few quarters simply in case Apple’s enterprise does not implode beneath the load of its personal success.
Detailed estimates:
3mo ending Sep21 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 84.8 - 1.24 My estimates 86.8 42.0 1.30 (16.64b shares) 3mo ending Dec21 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 119.2 - 1.87 Apple gde lo (e) 118.0 41.0 1.83* Apple gde hello (e) 123.0 42.0 1.99* My estimates 124.9 41.9 2.03 (16.49b shares) *EPS steering ranges derived from different figures offered by Apple and diluted shares excellent estimated by me 12m ending Sep22 Rev$B $EPS ---------------- ----- ---- Analysts consens 380.6 5.68 My estimates 412.9 6.42 Valuation Timeframe NTMfrom $EPS Y/Y Mult Val $* Div Tot --------- ------- ---- --- ---- --- --- ---- --- Path Val Oct2020 5.67 74% 18.0 102 3.8 0.85 107 Frwrd Val Oct2021 6.42 13% 21.3 137 2.6 0.94 140 1y Goal Oct2022 7.29 14% 22.6 165 1.8 1.10 168 2y Worth! Oct2023 8.02 10% 22.9 184 0.9 1.38 186 *Money per share stability web of debt and business paper(click on to enlarge)
F4Q21 Statements of Operations Revenues F4Q21e F4Q20 Y/Y% -------- ------ ------ ----- iPhone 42,401 26,444 60.3 Mac 9,757 9,032 8.0 iPad 7,386 6,797 8.7 W/H/A 8,937 7,876 13.5 -------- ------ ------ ----- Merchandise 68,480 50,149 36.6 Providers 18,292 14,549 25.7 -------- ------ ------ ----- Tot Revs 86,772 64,698 34.1 Gross Margin Breakdown -------- ------ ------ ----- Merchandise 23,722 14,952 58.7 Providers 12,756 9,737 31.0 -------- ------ ------ ----- Tot GM 36,478 24,689 47.8 -------- ------ ------ ----- Prod GM% 34.6% 29.8% 4.8 Svcs GM% 69.7% 66.9% 2.8 -------- ------ ------ ----- Tot GM% 42.0% 38.2% 3.9 Op Expns 11,415 9,914 15.1 -------- ------ ------ ----- OpIncome 25,063 14,775 69.6 Op Mrgn% 28.9% 22.8% 6.0 OIE 398* 126 215.7 -------- ------ ------ ----- Pre-Tax 25,460 14,901 70.9 Tax Fee 15.0% 15.0% 0.0 Tax Prov 3,819 2,228 71.4 -------- ------ ------ ----- Internet Incm 21,641 12,673 70.8 Internet Mrg% 24.9% 19.6% 5.4 Dil Shrs 16,641 17,257 -3.6 -------- ------ ------ ----- EPS $1.30 $0.73 77.1 Quantities in hundreds of thousands besides EPS in {dollars} and ratios in % *F4Q21 OI&E features a $400m achieve as my wild-ass stab on the mark-to-market influence of the $1b invested in $DIDI in 2016, IPO'd in late June, and which seemingly explains the first-ever point out of a possible mark-to-market influence on OI&E by CFO Luca Maestri over the past name in late July.
