Apple Inc.
Apple Inc. (NASDAQ: AAPL) creates, produces, and sells smartphones, tablets, wearables, and accessories, as well as several connected products. I Phone, Mac, iPad, Wearables, and home accessories are among the company's top offerings. Apple Inc. is the biggest company in the world as per the market capitalization.
Key Highlights
- The company reported YoY growth of 28.63% in total revenue to USD 378.3 billion in FY21 (ended December 25, 2021) compared to USD 294.1 billion in FY20.
- AAPL’s net income increased to USD 100.6 billion in FY21 from USD 63.9 billion in FY20, which is a massive growth of 57.3% YoY meaning improvement in operating and costing efficiency.
- As of December 31, 2021, the company had cash and cash equivalents of USD 63.9 billion which has reduced from USD 76.8 billion YoY.
- Apple debt to equity ratio (1.71x) remained almost same from the last year but it is very high compared to the industry average of 0.27x.
- Apple has a competitive advantage in terms of Net margins having a margin of 27.9% compared to industrial average of mere 6.3%, meaning good product pricing and cost control.
- The stock has broken short term (50-day) SMA support level and retesting it, while the long term (200-day) SMA support is at US$ 158.77. This means small correction is expected in near term.
- Recently, in March 2022, Apple announced that it would be halting sales in Russia, following its invasion of neighboring Ukraine. Management said that they will continue to evaluate the situation and are in communication with relevant governments on the actions they are taking.
- A Prolonged War in Ukraine could affect the semiconductor supply chain and company might have to cut productions.
Conclusion
Considering positive last year financials except poor debt to equity ratio in a rising interest rate environment, range bound technical and awaited quarterly result report on 28th April. We recommend a "Watch" rating on the stock at the closing price of USD 167.23, as of April 20, 2022.
Technical Price Chart (as on April 20, 2022). Source: REFINITIV, Analysis by Kalkine Group
Technical analysis summary
*Closing price as of April 20, 2022
Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
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 unfavorable 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.