January 27th Apple will report on what historically is its best business period of the year. ITZ sees a profit of $14.15 a share on revenue of $57.55 billion for the quarter ended in December, up from earnings of $13.87 a share on $54.5 billion in sales in the same period in 2012.
Look for Apple to report it sold about 55 million iPhones and 22 million iPads. In which they released its iPad Air tablet and expanded the release of the iPhone 5c and 5s to more than 30 countries after the initial launch on Sept. 20.
ITZ is expecting Apple to continue to deliver with more new products & services in 2014, iPhone 6 will be the major catalyst.
Things started to rock with week when Carl Icahn TWEETED that Apple is “ doing a great disservice to shareholders by not having markedly increased its buyback.” While he chastised Apple for not increasing the amount of cash it plans on returning to its shareholders, Icahn also said he has raised his stake in Apple by $500 million, to more than $3 billion, over the last two weeks.
For the last two quarters, according to Thomson Reuters consensus, the expected EPS and revenue growth rates are 10% for 2014, 10% in 2015 and 8% for fiscal 2016 eps and 8%, 7%, and 7% for revenue consensus and again, this is after the Icahn and China Mobile news.
Valuation, trading at 13xs and 11xs 2014 and 2015 EPS for expected growth of 10% and 8%, means AAPL could trade up to 15xs - 18xs forward estimates and still be reasonably valued.
Price to cash-flow ex-cash, AAPL is trading at 7xs and then 10xs free-cash-flow (ex the balance sheet hoard) so the stock is a true value stock with consumer-staple like growth rates.
Carl Icahn places a valuation @ $840 as stated in his letter...
In our opinion, a great example of a “no brainer” in today’s market is Apple. The S&P 500’s price to earnings multiple is 71% higher than Apple’s, and if Apple were simply valued at the same multiple, its share price would be $840, which is 52% higher than its current price."
In the last Apple blog post ITZ wrote..."Apple's price target of $550 by Jan 2014 & a 12 month objective of $650." link
click on chart to expand image