Star amateur Apple analyst is skipping quarterly estimates for 2020

For the first time in two decades of pinpoint Apple prognostication, Daniel (“deagol”) Tello has thrown in the towel.

Apple daniel Tello skipping smackdownFrom “Skipping Detailed Quarterly Estimates for Rest of FY 2020” posted Friday on deagol’s AAPL Model:

I have no way of figuring out the impact to global demand from various COVID-19 containment and mitigation policies in over 130 countries, neither today nor in a month when I would normally publish these estimates. In fact, I don’t think even Apple itself can, so I’m not expecting them to provide guidance for next quarter.

I don’t think Chinese manufacturing was significantly affected beyond a month or so, but the worldwide network of component supply dependencies and the demand uncertainty probably means Apple should be cautious in ramping production of existing and new products until most of the world has gone through this disruption. The flip side is a likely boost to Services revenue and possibly overall margins so long as HW product margins are not affected too much. Also, since demand is not destroyed but postponed, the rebound next year should be quite impressive, even bleeding into 2022.

In light of this unique situation, for the first time in two decades I will not be able to share detailed estimates for Q2 or Q3 guidance, but will stick with projections for FY21 and beyond, at least until we hear more from Apple. For the valuation model I’m holding the trailing numbers roughly flat until Dec, which is probably not far from what might actually happen.

Below: Tello’s current forecast, as detailed as he can make it…

Apple daniel Tello skipping smackdown

 

My take: With Turley Muller dead and Tello bowing out, my quarterly Earnings Smackdown for 2020 has lost two of its best.

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3 Comments

  1. David Emery said:
    An honest analyst, who recognizes the limits from a black swan event…

    Looking forward to when Deagol thinks things are calm enough to restart his estimates.

    4
    March 14, 2020
  2. Fred Stein said:
    I like the way he thinks and writes. Discretion is the better part of valor.

    Jason Zweig, in WSJ, addresses this issue – what we cannot control or predict – by advising people to focus on controlling their emotional bias.

    This turbulence gives Apple a chance to buy more AAPL, which is like a 5% annual DRIP (Dividend Re-Investment Plan). We can’t opt out. And we aren’t taxed. Kinda sweet.

    5
    March 14, 2020

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