APPLE STOCK

Fiscal 4Q 2022 Final Estimates


As of today’s closing price of $142.41, AAPL trades at a 20.0x multiple on my NTM EPS estimate (19.5x when excluding NTM net cash and dividends).

Lowered the long-term (beyond FY23) revenue growth rate by another point or so, now at mid single-digits, yielding mid-high single-digits in long-term EPS growth. New revenue streams won’t move the needle for the next 2y and will provide very low visibility of the growth potential even after 3-5y, although the stock price should begin to reflect whatever investors dream up of such long-term potential as soon as we will get any announcement, and probably even earlier.

In the short term, I trimmed 4Q22/FY23 revenue and EPS by $2/4b and 7/5¢ respectively, mostly due to FX. During uncertain times ahead Apple could easily decide to emphasize cash conservation but instead I’m going with a more deliberately opportunistic approach, given the attractive share price, by modeling at least $80b of the $86b remaining buyback authorization over the three quarters ending 2Q23 (totaling over $100b for the year and keeping it there for the next 3 years), as well as a dividend increase for next year comparable to the one done in 2018 (+16%) rather than the single-digit raise seen in the last 3 years. I doubt the 14-week Q1 has been considered much in consensus estimates. This represents 4-8% upside and perhaps explains some/most of my divergence for Q1.

Detailed estimates:

3mo ending Sep22  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   88.9     -  1.27
My estimates       90.1  42.5  1.35 (16.14b shares)


3mo ending Dec22  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens  128.4     -  2.14
Apple gde lo (e)  130.0  42.0  2.27*
Apple gde hi (e)  137.0  43.0  2.39*
My estimates      137.8  42.9  2.42 (15.97b shares)

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


12m ending Sep23  Rev$B  $EPS
----------------  -----  ----
Analysts consens  411.9  6.44
My estimates      431.4  7.12


Valuation
Timeframe  NTMfrom  $EPS  Y/Y  Mult  Val   $*   Div  Tot
---------  -------  ----  ---  ----  ---  ---  ----  ---
Trail Val  Oct2021  6.17  10%  21.5  133  3.0  0.90  136
Frwrd Val  Oct2022  7.12  15%  23.2  165  2.5  1.00  169
1y Target  Oct2023  7.61   7%  23.8  181  1.8  1.14  184
2y Value!  Oct2024  8.17   7%  23.9  196  1.1  1.28  198

*Cash per share balance net of debt and commercial paper

(click to enlarge)


F4Q22 Statements of Operations Revenues F4Q22e F4Q21 Y/Y% -------- ------- ------- ----- iPhone 43,593 38,868 12.2 Mac 9,997 9,178 8.9 iPad 7,926 8,252 -4.0 W/H/A 9,444 8,785 7.5 -------- ------- ------- ----- Products 70,959 65,083 9.0 Services 20,133 18,277 10.2 -------- ------- ------- ----- Tot Revs 91,092 83,360 9.3 Gross Margin Breakdown -------- ------- ------- ----- Products 24,289 22,293 9.0 Services 14,437 12,881 12.1 -------- ------- ------- ----- Tot GM 38,726 35,174 10.1 -------- ------- ------- ----- Prod GM% 34.2% 34.3% -0.0 Svcs GM% 71.7% 70.5% 1.2 -------- ------- ------- ----- Tot GM% 42.5% 42.2% 0.3 Op Expns 12,970 11,388 13.9 -------- ------- ------- ----- OpIncome 25,756 23,786 8.3 Op Mrgn% 28.3% 28.5% -0.3 OIE 200 -538 N/A -------- ------- ------- ----- Pre-Tax 25,956 23,248 11.7 Tax Rate 16.0% 11.6% 4.4 Tax Prov 4,153 2,697 54.0 -------- ------- ------- ----- Net Incm 21,803 20,551 6.1 Net Mrg% 23.9% 24.7% -0.7 Dil Shrs 16,142 16,635 -3.0 -------- ------- ------- ----- EPS $1.35 $1.24 9.3 Amounts in millions except EPS in dollars and ratios in %



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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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