Fiscal 3Q 2016 Final Estimates

As of yesterday's market close of $99.83, AAPL is trading at a 11.3x multiple on my next-twelve-months EPS estimate (7.8x when excluding next-12m net cash and div).

Not much to say. I expect a return to flat/growth by 1H next year, so forward valuation already on the rebound. Market discount of 15-20% (to my current fair value, but ~50% to broader market multiples) implies investors likely expect no meaningful rebound within next 2-3 years and significantly discount the cash and equivalents mostly parked abroad.

For the current quarter I do expect a bigger impact from iPhone SE, driving higher revenue but lower margins, recovering 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%)