Final estimates of fiscal 2Q 2016

Since yesterday’s $ 112.10 market close, the AAPL has traded at 11.0x multiple times in my EPS estimate for the next twelve months (8.1x if I exclude the next 12 million net cash and giant).

The downgraded iPhone estimates for fiscal year 2016 are significantly in line with recent Apple guidelines, but taking into account management suggestions, it’s only a short-term decline for a few quarters, and next year returns to steady / slight unit growth. The end result is a revised fair value and the target for the year is $ 132/146 ($ 140/157).

Expect very aggressive buyout activity during the last and current quarters of up to $ 18 billion per quarter, which was partially confirmed by the issuance of $ 15.6 billion in debt last quarter. Expect the redemption power to be increased to $ 175 billion from the current $ 140 billion by next year with long-term debt levels to $ 100 billion from the current $ 78 billion. Expect a quarterly dividend increase of 11.5% to 58 cents per share.

Detailed estimates:

3mo ending Mar-2016  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    52,050      -   2.00
Apple guide low       50,000   39.0   1.86*
Apple guide high      53,000   39.5   2.07*
Deagol estimates      53,373   39.9   2.11 (5.50b shares)


3mo ending Jun-2016  Rev($M)  GM(%)   EPS($)
-------------------  -------  -----   ------
Analysts consensus    47,540      -    1.77
Apple guide low (e)   46,000   38.5    1.67*
Apple guide high(e)   49,000   39.5    1.91*
Deagol estimates      49,836   39.3    1.94 (5.34b 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   227,020   9.05
Deagol estimates     235,021   9.66


Valuation (fwd-12mo from)  EPS($)  Y/Y  10x  Cash*  Div  Tot
-------------------------  ------  ---  ---  ----  ----  ---
Trailing       (Apr-2015)    9.20  14%   92    26  2.08  120
Fair value     (Apr-2016)   10.17  11%  102    28  2.32  132
1yr target     (Apr-2017)   10.85   7%  109    35  2.56  146

* Cash per share balance net of long-term debt

(click to enlarge)

F2Q16 Revenue breakdown:
iPhone    34,658 (52.0 × $666)
iPad       4,784 (10.5 × $456)
Mac        5,637 ( 4.5 × $1,253)
Services   5,541
Other      2,754 ( 2.5 × $431 = 1,078 Watch)

Income statement:
Revenue   53,373
COGS      32,066
GM        21,307  39.9%
OpEx       6,045
OpInc     15,262  28.6%
OIE          333
Pre-tax   15,595
Tax        3,977  25.5%
NetInc    11,618  21.8%
Shares     5,499
EPS($)      2.11

(amounts in millions except $ASP, $EPS, and %ratios)