Apple: You Shall Not Bet Against The iPhone

107
Comment
1

Apple: You Shall Not Bet Against The iPhone

Seeking Alpha2023-04-17

SummaryBased on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estimates to be reasonable, despite the challenging macroeconomic backdrop.Investors should consider that ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

107

Report

Comment

Sphere
·2023-04-18
Of course
Reply
4
Report
Fold Replies
- Sphere:
  Up
  2023-04-18
  Reply
  Report
Cheryi
·2023-04-18
Ok
Reply
16
Report
Fold Replies
- Cheryi:
  ok
  2023-04-18
  Reply
  Report
DQuek
·2023-04-17
Apple is so powerful in securing its market shares!
Reply
21
Report
Hopehope赋予希望
·2023-04-17
I prefer xiaomi
Reply
17
Report
Fold Replies
- StreetCat:
  I holding a 10 Yr old Huawei and still going strong when it is gone I will go xiaomi for sure too [Pitiful]
  2023-04-18
  Reply
  Report

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/1116564575?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2023-04-17 22:00","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"1116564575","market":"us","top_or_hot":-1,"title":"Apple: You Shall Not Bet Against The iPhone","media":"Seeking Alpha","content":"<div>\n<p>SummaryBased on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estimates to be reasonable, despite the challenging macroeconomic backdrop.Investors should consider that ...</p>\n\n<a href=\"https://seekingalpha.com/article/4594405-apple-stock-iphone-loyalty-strong-purchase-retention-q2-earnings-preview\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple: You Shall Not Bet Against The iPhone</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple: You Shall Not Bet Against The iPhone\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-17 22:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4594405-apple-stock-iphone-loyalty-strong-purchase-retention-q2-earnings-preview><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryBased on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estimates to be reasonable, despite the challenging macroeconomic backdrop.Investors should consider that ...</p>\n\n<a href=\"https://seekingalpha.com/article/4594405-apple-stock-iphone-loyalty-strong-purchase-retention-q2-earnings-preview\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AAPL","symbol_name":"苹果","start_time":0,"source_url":"https://seekingalpha.com/article/4594405-apple-stock-iphone-loyalty-strong-purchase-retention-q2-earnings-preview","article_id":"1116564575","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1116564575","pubTimestamp":1681740021,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummaryBased on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estima","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AAPL":"苹果"},"translate_title":"苹果：你不应该赌苹果","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AAPL":0.9},"content_text":"SummaryBased on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estimates to be reasonable, despite the challenging macroeconomic backdrop.Investors should consider that the iPhone accounts for about 52% of Apple's total sales, and an even larger share of profits.with continued strong purchase intention going forward.Surveys from Piper Sandler and UBS highlight exceptional iPhone loyalty and strong purchase intention going forward.A weak demand for the Mac is thus less concerning, with the segment accounting for only about 10% of Apple's total sales.As a function of valuation - with AAPL stock's estimated 2023 P/E priced close to 30x - I am cautious to assign a 'Buy' recommendation.yalcinsonat1/iStock Editorial via Getty ImagesI have previously argued that--anchored on fundamentals--Apple stock' (NASDAQ:AAPL) fair implied target prices should be somewhere around $165. Now, with Apple stock trading very close to this level and the FY 2023 Q2 earnings expected for May 4th, I feel it is a good time to revisit the investment thesis for Apple.For reference, Apple stock has appreciated 32% YTD, as compared to a gain of only 8% for the S&P 500 (SP500). Needless to say, this is quite an amazing outperformance for a >$2.6 trillion dollar mega-cap business.AAPL vs SPY YTD price performance 2023Seeking AlphaI view Apple's Q2 2023 earnings estimates as reasonable, given continued strength in the company's iPhone business. But, as a function of valuation--with AAPL stock's estimated 2023 P/E priced close x30--I am cautious to assign a 'Buy' recommendation. Apple remains a 'Hold' for me with a $164.85/share target price.Apple's Q2 2023 PreviewBased on data collected by Seeking Alpha, as of April 16th, a total of 33 analysts have provided their projections for Apple's Q2 FY 2023 results. These projections indicate that Apple's total sales for the quarter are expected to fall within the range of $89.8 billion to $98.9 billion, with an average estimate of $92.8. Based on the average analyst consensus estimate, it is suggested that Apple's Q2 2023 sales may contract by approximately 4.5% YoY as compared to the same quarter in FY 2022.Apple Q2 FY 2023 revenue revisions/ estimatesSeeking AlphaFurthermore, analysts have provided earnings per share estimates ranging from $1.35 to $1.56, with an average of $1.43. While the range of EPS estimates is quite wide, assuming the average of $1.43, analysts anticipate that Apple's Q2 FY 2023 earnings will contract by about 6.8% versus the Q2 FY 2022 period.Apple Q2 FY 2023 EPS revisions/ estimatesSeeking AlphaReflecting on analysts' estimates for Apple's Q2 FY 2023 quarter, it is worth noting that, both revenue and EPS estimates have started to trend downwards since early 2023, indicating a divergence of how analysts and markets view Apple's business fundamentals (AAPL stock up >30% YTD).A Review of Apple's Business FundamentalsMac demand is crashingApple Inc.'s personal computer shipments dropped by 40.5% in the first quarter, marking the worst decline since the end of 2000, due to sluggish demand and an industrywide glut, particularly in the consumer market. This decline is part of a broader trend in the PC market, with all PC makers experiencing a slump of 29% in shipments as the demand surge driven by pandemic-era remote work subsided. Apple, which had been relatively resilient during the pandemic, is preparing to launch new models later this year in hopes of spurring demand, while analysts predict a potential rebound for PC makers in 2024 due to aging hardware replacement and an improving global economy.The iPhone Is Still KingInvestors should consider that the iPhone accounts for about 52% of Apple's total sales, and an even larger share of profits. And a weak demand for the Mac is thus less concerning, accounting for only about 10% of Apple's total sales.Apple revenue exposureApple FY 2022 reporting, Author's graphThe good news is that the demand for iPhones remains healthy, despite a challenging macroeconomic backdrop.Notably, analysts from UBS (UBS Evidence Lab proprietary research) conducted a comprehensive survey of approximately 4,000 iPhone users in four different regions across the world to gain insights into the installed base and adoption of various Apple services.The survey revealed that as of March 2023 the iPhone retention rate in the United States has increased to 83%, as compared to 81% in 2022 (a notable increase of 200 basis points), and as compared to about 76% pre-COVID. In China, the iPhone retention rate has also rise, to 44%, versus approximately 29% two years ago.Moreover, the survey highlights that approximately 45% of all iPhone users own devices below the iPhone 12 generation, and about 20% own devices below the iPhone 11 generation, suggesting the likelihood of a strong upgrade cycle within the next 12-24 months.UBS now forecasts that the global installed base for the iPhone will grow to about 1,4 billion units by 2025, and 1,5 billion units by 2027.UBS Evidence Lab - Survey for the IphoneUBS Evidence LabAlso Piper Sandler conducted a survey (teens) that confirmed that confirmed UBS' findings that iPhone ownership is at near all time levels, with continued strong purchase intention going forward. Piper Sandler's equity research team surveyed a total of 5,690 teenagers across 47 states in the U.S, with an average household income slightly below $67,691 (less than national average of close to $70,000) and an average age of 16.2 years. According to Piper research, an impressive 87% of U.S. teenagers own an iPhone, and over 25% of these teenagers show intention to upgrade their current iPhone to a iPhone 14 during the Spring/Summer period.Piper Sandler Spring Survey - Teens, IPhonePiper Sandler Spring SurveyThe Services Ecosystem Continues To GrowThe revenue share of Apple's services ecosystem now accounts for approximately 20% of the company's total topline. Again referencing UBS' iPhone survey, the adoption of Apple Services shows incremental improvement. Apple's major offerings such as Apple Music and iCloud continue to exhibit the highest attachment and growth rates, while the respective rates for Arcade, News+, TV+, and Fitness appear to plateaued at levels lower levels.UBS Evidence Lab - Survey for the IphoneUBS Evidence LabBroadly speaking, as long as the iPhone is doing well, Apple's services ecosystem is also likely to do well, given the integrated nature of hardware plus services. The UBS survey appears to confirm the thesis: approximately 60% of respondents highlighted that they would see it as very inconvenient to leave Apple's services ecosystem, even if they would like to switch to another smartphone.Apple Pushes To Diversify Manufacturing FootprintWhile the global demand for iPhones and other Apple hardware products is likely to remain robust for the foreseeable future, analysts should not forget to consider the supply chain necessary to serve this demand. With that frame of context, Apple is reportedly intensifying its efforts to diversify its manufacturing footprint in Asia. This move is said to be driven by concerns over potential risks arising from escalating geopolitical tensions, and coincides with reports that Apple is pressuring its suppliers to accelerate diversification beyond China. With that frame of reference, Apple's largest supplier, Foxconn, is reported to be expanding production in India, including a substantial $700 million investment in a new plant. According to JPM's Global Technology team, the current estimate is that by 2025, approximately 25% of Apple products will be manufactured outside of China, a significant increase from the current level of less than 5%. Vietnam and India are reportedly emerging as preferred countries of choice for Apple's manufacturing diversification strategy.ConclusionIn summary, Apple's business fundamentals are experiencing mixed trends. While demand for Mac computers has declined significantly, the iPhone continues to be the primary revenue driver for the company, with a healthy demand and high retention rates in the United States and China. The Services ecosystem, which accounts for a significant portion of Apple's revenue, is also showing incremental growth, with Apple Music and iCloud leading the way. Additionally, customer loyalty to Apple's ecosystem remains strong.Based on the sustained success of Apple's iPhone business, I find the Q2 2023 earnings estimates to be reasonable, despite the challenging macroeconomic backdrop for consumer goods. However, considering the current valuation of AAPL stock with an estimated P/E ratio of around 30x for 2023, I exercise caution in recommending a 'Buy' rating.This article is written by Cavenagh Research for reference only. Please note the risks.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[{"id":9944896526,"gmtCreate":1681775887665,"gmtModify":1681775891403,"author":{"id":"3573432013960035","authorId":"3573432013960035","name":"Sphere","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":4,"crmLevelSwitch":0},"htmlText":"Of course","listText":"Of course","text":"Of course","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9944896526","repostId":1116564575,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106321003,"gmtCreate":1681775905715,"gmtModify":1681775912018,"authorId":3573432013960035,"author":{"id":3573432013960035,"authorId":3573432013960035,"name":"Sphere","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944896526,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Up</span>","text":"<span class=\"s1\">Up</span>","html":"<span class=\"s1\">Up</span>"}],"langContent":"EN"},{"id":9944146853,"gmtCreate":1681760139973,"gmtModify":1681760143763,"author":{"id":"3568940106394782","authorId":"3568940106394782","name":"Cheryi","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":16,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9944146853","repostId":1116564575,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106320462,"gmtCreate":1681760152901,"gmtModify":1681760159164,"authorId":3568940106394782,"author":{"id":3568940106394782,"authorId":3568940106394782,"name":"Cheryi","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944146853,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"}],"langContent":"EN"},{"id":9944114903,"gmtCreate":1681742358602,"gmtModify":1681742362802,"author":{"id":"3579899712012688","authorId":"3579899712012688","name":"DQuek","avatar":"https://static.tigerbbs.com/0041a6750d53c4d39f0f9251bea439d3","vip":1,"crmLevel":5,"crmLevelSwitch":1},"htmlText":"Apple is so powerful in securing its market shares!","listText":"Apple is so powerful in securing its market shares!","text":"Apple is so powerful in securing its market shares!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":21,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9944114903","repostId":1116564575,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9944378346,"gmtCreate":1681728370185,"gmtModify":1681728374916,"author":{"id":"3563421686188310","authorId":"3563421686188310","name":"Hopehope赋予希望","avatar":"https://community-static.tradeup.com/news/46495f44529967f5d3b4d03a47167f5b","vip":2,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":8,"crmLevelSwitch":1},"htmlText":"I prefer xiaomi","listText":"I prefer xiaomi","text":"I prefer xiaomi","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":17,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9944378346","repostId":1116564575,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106322586,"gmtCreate":1681822083461,"gmtModify":1681825611186,"authorId":3578091555231876,"author":{"id":3578091555231876,"authorId":3578091555231876,"name":"StreetCat","avatar":"https://community-static.tradeup.com/news/10240289f5373e15472b574f0d2f37a8","vip":1,"crmLevel":5,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944378346,"type":1,"supId":0,"prevId":0,"content":"I holding a 10 Yr old Huawei and still going strong when it is gone I will go xiaomi for sure too  [Pitiful]","text":"I holding a 10 Yr old Huawei and still going strong when it is gone I will go xiaomi for sure too  [Pitiful]","html":"I holding a 10 Yr old Huawei and still going strong when it is gone I will go xiaomi for sure too  [Pitiful]"}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":107,"commentSize":0,"repostSize":4,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}