Working his way through the Dow 30, this guy set a $119 Apple target (video)

9 Comments

  1. Jerry Doyle said:
    Mr. Copell neglected to consider a critical factor in his Apple PT assessment. Yes, Apple’s iPhone makes ups ½ of its business, but I remember a few years past when the iPhone made-up 70 percent of Apple’s revenues. Apple’s revenues are coming from an increasing diversified revenue base whose other components are growing rapidly, thus making Apple less depended year-to-year on iPhone sales. A drop from 70% to 50% is 20%. At the current rate we may see iPhone sales in a few years consisting of only 30% of Apple’s revenues as the company’s portfolio of products continue to evolve.

    My retort to Mr. Copell is that Apple’s product growth evolution shows growing diversification in product segments for continued Apple growth going forward with less dependency increasing year-to-year on iPhone revenue.

    8
    June 20, 2021
    • David Emery said:
      Not just less dependency on iPhone sales, but less seasonality, too. Services revenue is much more evenly distributed across the year.

      2
      June 20, 2021
  2. Kirk DeBernardi said:
    First off…who’s Jimmy?

    Second, he seems “worried” that the most successful consumer product in the world takes up too much of Apple’s gross revenue and profit. Hasn’t seemed to fall out of favor yet.

    I didn’t hear him mention anything about the 98% sat rate…

    …nor the strong and steadily increasing “other than iPhone” component of their business…

    …nor the steadily increasing worldwide customer base…

    …nor the advent and effect of their in-house silicon…

    …nor their lead in wearables…

    …nor their sticky and satisfying walled garden of a growing ecosystem…

    …nor their link-to-link historical track record of product innovation and the current strongest portfolio of products ever.

    Sad he’s going to wait until AAPL hits $119 and that he only owns one share of AAPL.

    He might miss his train forever with this “math”.

    6
    June 20, 2021
  3. Kirk DeBernardi said:
    One more thing…

    …it was nice of him to mention that Apple actually has a doubled profit margin over that of their fellow businesses in the Standard & Poor’s 500.

    When you think of it, what company wouldn’t want to be like Apple?

    7
    June 20, 2021
  4. Gregg Thurman said:
    Spreadsheet analysis devoid of factors such as historical growth rates, market growth potential, customer retention/satisfaction rates, historical ROI on R&D spend, growth in R&D spend, share count reduction, the delta between share buyback cost (purchased at a premium to then actual trading value) and present value etc, etc.

    Then I take issue with his 5% cap rate. That might be a “standard” analysis rate, but it isn’t the rate investors are getting in Treasuries and Bonds (the ultimate in safety). Because of the relative risk involved Equities/Bonds and Equities I’d triple the Bond cap rate. Given Apple’s historic multi-decade growth rate and history of successful new product launches I’d use a cap rate double that of Bonds and Treasuries ~2% – 3%. The high of that range results in a valuation of about $200

    This is the kind of analysis I’d expect from an unimaginative 4th year business management student.

    4
    June 20, 2021
    • John Konopka said:
      Seems like he is really unfamiliar with Apple. He’s going through the DOW and the next company to work on was called Apple. He looked up the current information and did some superficial analysis on that.

      Oh, they just had this event called WWDC(?) and they announced some software updates which is good. LOL.

      2
      June 20, 2021
  5. Dave Ryder said:
    Agree with comments above. Would want to know what’s considered in the projections on which he ran his DCF. Apple is likely to introduce products that don’t exist today. I own because I believe in the company.

    1
    June 20, 2021
  6. Michael Goldfeder said:
    “If if and and were pots and pans, then the whole world would be a kitchen.” His thesis that if Apple produces a crappy iPhone then their stock will tank is reminiscent of saying: what if people get tired of breathing oxygen? Wasn’t Apple supposed to get hammered during the pandemic as supply chains were shut down, all Apple retail stores, and nobody was going to buy any more Apple products?

    Apple has arrived as a consumer staple and the pandemic has injected a revival into iPads, Macs, and iMacs that nobody saw coming. Add in the M1 Silicone chip that has just put all other “competitors” in the dust, and the incursion into the workplace that has displaced the “Wintel” option, and this company is on a trajectory that will only add to revenues, FCF, and EPS for years to come.

    How much that adds to the already growing ecosystem of loyal customers is bound to be quite significant. So while Jimmy Copell waits for $114.00 a share, with stock buybacks of $124ish for the past 4 1/2 months, he will hits his strike price several years out when Apple has another multi share split of their stock.

    “IF” he was smart, he should have added to his position already.

    5
    June 20, 2021
  7. David Emery said:
    What did he say about Microsoft?

    1
    June 20, 2021

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