November 2, 2023, $173.93
Business Overview:
- Apple Inc. (Apple) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories and sells a range of related services. The Company’s products include iPhone, Mac, iPad, AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and accessories.
Maverick Guidance:
- Short-term technical buy/sell recommendation: Prior SELL
- Long-term portfolio recommendation: ACCUMULATE whenever the RSI-14 technical indicator is below 30 on the Daily data charts or if it is below 50 when the Daily RSI-14 is rising.
- Maverick Investor Guidance: Apple (AAPL) continues to show resilience in facing challenges such as supply chain disruptions, inflation, and unfavorable currency effects. The company’s strong brand, diverse product and service offerings and growing base of active devices provide a solid foundation for every Maverick Investor Portfolio.
- While short-term challenges always exist, Apple’s focus on higher-margin services and its innovative ability position it well for continuous growth.
- However, Maverick Investors should consider waiting for a more favorable entry or re-entry point, as the stock has recently seen a pullback of -12.1% from its high of $197.96 after significant gains. The stock is still up +33.9% YTD.
- 4Q2023 earnings jumped +13% to $1.46 (vs analyst consensus of $1.31), and revenue dropped -1% versus the same quarter a year ago.
Consideration for Maverick Portfolio:
- AAPL is appropriate for all types of Maverick Investors, from Conservative to Aggressive Growth.
Company SWOT Analysis
Internal Strategic Factors:
Strengths:
- Strong brand and customer loyalty.
- Diverse product and service offerings.
- Robust ecosystem with a large base of active devices.
- Strong financial performance with consistent profitability.
- Strong service growth and a growing base of paid subscriptions.
Weaknesses:
- Vulnerability to supply chain disruptions.
- Exposure to unfavorable currency effects.
- Dependence on iPhone sales for a significant portion of revenue.
Opportunities:
- Growth potential in emerging markets.
- Expansion of the Services segment.
- Continued innovation and product development.
- Increasing demand for technology and digital services.
Threats:
- Inflation and higher interest rates affect consumer spending.
- Economic downturn or recession.
- Intense competition in the technology industry.
- Regulatory challenges and privacy concerns.
Market Guidance:
- Consensus Analyst Ratings— MarketBeat = Moderate Buy, TipRanks = Moderate Buy
- 31 Wall Street analysts have offered 12-month price targets in the last 3 months. There are 22 Buy, 9 Hold, and zero Sell. (from TipRanks)
- Based on 31 Wall Street analysts offering 12-month price targets in the last 3 months, the average price target is $203.35, with a high forecast of $240.00 and a low forecast of $150.00. The average price target represents a +16.9% change from the Nov. 1 closing price of $173.97 (from TipRanks)
- Dividend Yield: $0.24 per share paid quarterly to yield 0.55%.
- Dividend growth for 11 years. (from TipRanks)
- Technical Sentiment (based on Technical Indicators and Moving Averages) (November 1 ahead of Nov 2 earnings report):
- Investing.com = Daily (SELL) and Weekly (STRONG SELL)
- TipRanks = Daily (SELL) and Weekly (NEUTRAL)
Value Line Guidance:
- Company Financial Strength Rating: A++
- Share Price Safety: 1=best. 5=worst 1 of 5
- Market Timing: 3 of 5
- Technical Rank: 2 of 5
- Beta: 1.00
- Stock’s Price Stability: 80/100
- Price Growth Persistence: 100/100
- Earnings Predictability: 85/100
- Average Annual PE: 24
- Average Annual Sales Growth in the past 5 years: +14.5%
- Average Annual Sales Growth for the next 5 years: +10.0%
- Average Annual Cash Flow Growth in the past 5 years: +15.5%
- Average Annual Cash Flow Growth for the next 5 years: +10.0%
- Average Annual Earnings Growth in the past 5 years: +17.5%
- Average Annual Earnings Growth for the next 5 years: +10.5%
- Average Annual Dividend Growth in the past 5 years: +9.5%
- Average Annual Dividend Growth next 5 years: +10.5%
- Average Annual Dividend Yield 3 to 5 years: +0.7%
Financial Performance
- 10-year Average Annual Total Return: +26.64% (through Nov 1, 2023)
- EPS
- 2020: $3.28
- 2021: $5.61
- 2022: $6.11
- 2023: e$6.05
- 2024: e$6.60 (from Value Line Quarterly Report)
- Average Annual PE: 24 (VL Quarterly Report)
- PEG Ratio: 4.66 (FinViz)
- Beta: 1.31 (FinViz)
Quarterly Reports Summaries (including Revenue, Cash Flow, Earnings):
Overall review of the past three quarters’ earnings reports:
2023 4Q2023 (September) (released Nov. 2, 4:30 pm ET)
- Apple’s fiscal 2023 fourth-quarter revenue is $89.5 billion, down -1% YoY.
- Earnings per diluted share increased by +13% YoY to $1.46.
- iPhone revenue in the September quarter set a new record.
- Services revenue also achieved an all-time high.
- Apple’s CEO, Tim Cook, highlights the company’s strong product lineup, including the iPhone 15 series and the introduction of carbon-neutral Apple Watch models.
- Luca Maestri, Apple’s CFO, emphasizes the increase in the active installed base of devices and the company’s continued investments in long-term growth plans.
- Apple’s board of directors declares a cash dividend of $0.24 per share of the Company’s common stock, payable on November 16, 2023, to shareholders of record as of November 13, 2023.
2023 3Q2023 (June)
- Apple’s latest financial results showed a mixed performance, with June-quarter sales slipping -1.4% YoY but profits improving with a +5% YoY increase in earnings per share. The company is expected to close out the year positively and carry momentum into fiscal 2024. However, it faces challenges such as unfavorable currency effects, inflation, and higher borrowing costs. Positive factors include strong service growth and continued acquisition of new customers.
2023 2Q2023 (March)
- Apple’s revenue and earnings improved in the March quarter, with sales down -3% YoY but improving from the previous quarter. Foreign exchange continued to be challenging, and inflation and higher interest rates affected buying power. However, higher-margin services continued to perform well, and iPhone sales were strong in emerging markets.
2023 1Q2023 (December)
- With December quarter sales down -5% and earnings declining slightly over 10%, Apple had a slow start in fiscal 2023. Unfavorable currency effects and COVID-19 disruptions affected sales. While the Services business set a revenue record, challenges like supply-chain issues, high inflation, and unfavorable foreign exchange rates persisted. The full-year sales estimate was scaled back, but the company continued progressing in higher-margin offerings.
The 3-to-5-year Operational and Financial Outlook:
- Despite continually slower growth over the past ten years, the 3-to-5-year outlook indicates continued +10% or more growth in revenue, cash flow, earnings, and dividends.
- As it is one of the world’s most successful companies, with a 10-year Average Annual Total Return of +26.55% (through Oct 31, 2023), the long-run outlook is perpetually optimistic.
Noteworthy Strategic Developments:
FinViz Snapshot: https://finviz.com/screener.ashx?v=342&f=idx_dji&t=AAPL
10-Year Historical Price Chart:
https://tvc-invdn-com.investing.com/data/tvc_1ebe1be73d791652d07561a914176dec.png
Point & Figure Chart: https://stockcharts.com/freecharts/pnf.php?c=AAPL,PWTAWANRNO[PA][D][F1!3!!!2!20]
