Apple Inc.
AAPL Details
Apple Inc. (NASDAQ: AAPL) develops, manufactures, and markets smartphones, tablets, wearables, accessories, and a variety of linked devices. The company's key products include the iPhone, Mac, iPad, Wearables, and home accessories. Apple Inc. is the biggest company globally as per the market capitalization.
Latest News:
- Aiding and Assisting Deaf: On May 17, 2022, Apple unveiled new software features that make it easier for people with disabilities to navigate, interact, and get the most out of their Apple products. These significant enhancements combine Apple's latest technologies to provide users with unique and customizable tools, and they continue the company's long-standing dedication to producing products that work for everyone. With advances in hardware, software, and machine learning, people who are blind or have low vision can use their iPhone® and iPad® to navigate the final few feet to their destination with Door Detection; users with physical and motor disabilities who rely on assistive features like Voice Control and Switch Control can fully control Apple Watch® from their iPhone with Apple Watch Mirroring. Apple also adds over 20 more languages and locales to its industry-leading screen reader VoiceOver. These improvements will be available later this year as part of Apple platform software releases.
- Quarterly Dividend: AAPL's board of directors had declared a cash dividend of USD 0.23 per share of the company's common stock, up 5%, payable on May 12, 2022, to shareholders of record as of the close of business on May 9, 2022.
Q2Y22 Results:
- Growth in Topline: The company reported a growth of 8.59% in revenues to USD 97.28 billion in Q2FY22 (ended March 26, 2021) compared to USD 89.58 million in Q2FY21, driven by 6.57% and 17.28% growth in Products and Services segments, respectively.
- Increase in Net Income: However, AAPL witnessed an increase in net income to USD 25.01 million in Q2FY22 vs. USD 23.63 million in Q2FY21.
- Cash and Debt Position: As of March 26, 2022, the company had a cash balance (including short-term investments) of USD 51.51 billion with total outstanding debt of USD 119.89 billion.
Key Risk:
- Supplier Concentration Risk: Because specific components are currently obtained from a single or limited source, the AAPL faces substantial supply and cost risks. Many components, particularly those obtained from multiple sources, are occasionally vulnerable to industry-wide shortages and significant commodity price changes, which can have a materially adverse impact on the Company's business, results of operations, and financial condition.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation:
AAPL' stock price has fallen 18.38% in the past three months and is currently trading close to the lower end of its 52-week range of USD 122.86 to USD 182.94. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 178.56.
Considering the correction in the stock price, strong market presence, high margins, robust dividend yield, current valuation, and associated risks. We recommend a "Buy" rating on the stock at the closing price of USD 140.82 as of May 18, 2022.
One-Year Technical Price Chart (as on May 18, 2022). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary:
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.