Final estimates of the fiscal third quarter of 2016

Since yesterday’s $ 99.83 market close, the AAPL has traded 11.3x more times according to my EPS estimate for the next twelve months (7.8x if we exclude the next 12 million net cash and giant).

There is not much to say. I expect to return to the apartment / growth by the first half of next year, so the term valuation is already recovering. A market discount of 15-20% (according to my current fair value, but ~ 50% according to broader market multipliers) implies that investors probably do not expect a significant jump in the next 2-3 years and significantly discount cash and equivalents that are mostly parked abroad.

For the current quarter, I expect a bigger impact of the iPhone SE, bringing higher revenues but lower margins, recovering in the next quarter.

Detailed estimates:

3mo ending Jun-2016  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    42,010      -   1.38
Apple guide low       41,000   37.5   1.31*
Apple guide high      43,000   38.0   1.45*
My estimates          43,354   37.9   1.46 (5.46b shares)

3mo ending Sep-2016  Rev($M)  GM(%)   EPS($)
-------------------  -------  -----   ------
Analysts consensus    46,030      -    1.61
Apple guide low (e)   45,000   36.5    1.46*
Apple guide high(e)   47,000   37.5    1.65*
My estimates          47,838   37.3    1.67 (5.36b shares)

*EPS guidance ranges derived from other figures provided
 by Apple and diluted shares outstanding estimated by me


12m ending Sep-2017  Rev($M)  EPS($)
-------------------  -------  ------
Analysts consensus   223,900   8.91
My estimates         224,248   9.28


Valuation (fwd-12mo from)  EPS($)  Y/Y  10x  Cash*  Div  Tot
-------------------------  ------  ---  ---  ----  ----  ---
Trailing       (Jul-2015)    8.60  -1%   86    27  2.13  115
Fair value     (Jul-2016)    8.84   3%   88    29  2.32  120
1yr target     (Jul-2017)    9.59   8%   96    34  2.46  132

* Cash per share balance net of long-term debt

(click to enlarge)

F3Q16 Revenue breakdown:
iPhone    25,655 (42.0 × $611)
iPad       4,222 ( 9.5 × $444)
Mac        5,631 ( 4.5 × $1,251)
Services   5,840
Other      2,006 ( 2.0 × $359 = 718 Watch)

Income statement:
Revenue   43,354
COGS     (26,920)
GM        16,434  37.9%

OpEx     ( 6,043)
OpInc     10,391  24.0%

OIE          298
Pre-tax   10,689

Tax       (2,726) 25.5%
NetInc     7,963  18.4%

Shares     5,458
EPS        $1.46

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