Since closing the market on Friday at $ 97.13, the AAPL has traded 9.1x more times according to my EPS estimate for the next twelve months (6.0x if I exclude the next 12 million net cash and giant).
Last quarter, $ 19 billion in net revenue speaks volumes (details below). Looking ahead, I am revising my next estimate of 12-18 months from $ 164 to $ 157 due to reduced estimated revenue and EPS (FG16 / 17 by approximately 4/5%) mostly on the iPhone (now a single-digit unit is sold – through growth ).
Promising guidelines: Contrary to some recent sales reports, I believe iPhone channel stocks were still at the lower end of the demand range for 5-7 weeks or so by the end of September. Another week of filling the canal (representing 3-4m units deployed through 1H16) would be appropriate, and even adding 6-7m would not violate the 7 week upper limit. This would support flat sales (any additional demand, for example, from new 4-inch factors rumored to require even higher levels), allow for slight growth in deliveries, and secure the best until the current quarter (F2Q16), which are recently reduced estimates on the sales side.
I expect management to act opportunistically in the share buyback during the current quarter, likely depleting the remaining $ 30 billion already approved in the program before the end of the fiscal year and demanding that the expansion be announced in April. However, after fiscal year 16, I do not model more than what is needed to reimburse employee grants (mainly due to concerns / ignorance about comfortable long-term debt levels and foreign tax / political uncertainty regarding repatriation), which also implies further potential for EPS beyond framework of the estimated strong guidance for the current quarter if a significant permit is announced in April.
Detailed estimates:
3mo ending Dec-2015 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 76,760 3.24 Apple guide low 75,500 39.0 3.09* Apple guide high 77,500 40.0 3.31* Deagol estimates 78,464 40.4 3.39 (5.60b shares)
3mo ending Mar-2016 Rev($M) GM(%) EPS($) ------------------- ------- ----- ------ Analysts consensus 56,700 2.28 Apple guide low (e) 58,000 39.0 2.25* Apple guide high(e) 60,000 40.0 2.45* Deagol estimates 60,751 40.5 2.52 (5.52b shares) *EPS guidance ranges derived from other figures provided by Apple and diluted shares outstanding estimated by me 12m ending Sep-2016 Rev($M) EPS($) ------------------- ------- ------ Analysts consensus 238,570 9.58 Deagol estimates 248,245 10.33 Valuation (fwd-12mo from) EPS($) Y/Y 10x Cash* Div Tot ------------------------- ------ --- --- ---- ---- --- Trailing (Jan-2015) 9.52 28% 95 27 2.03 124 Fair value (Jan-2016) 10.68 12% 107 31 2.26 140 1yr target (Jan-2017) 11.61 9% 116 38 2.56 157 * Cash/share balance net of long-term debt
(click to enlarge)
F1Q16 Revenue breakdown: iPhone 51,311 (78.0 × $658) iPad 8,463 (19.0 × $445) Mac 7,079 (5.75 × $1,231) Services 5,407 Other 6,204 (6.50 × $519 = 3,375 Watch) Income statement: Revenue 78,464 COGS 46,794 GM 31,671 40.4% OpEx 6,333 OpInc 25,337 32.3% OI&E 399 Pre-tax 25,737 Tax 6,743 26.2% NetInc 18,994 24.2% Shares 5,602 EPS($) 3.39 (units, shares, and $ in millions except $ASP, EPS, and ratios)
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