Apple Stock: You Have Been Warned Again

Summary:

  • Apple Inc. may consider a price cut for next year’s iPhone 15 and the larger iPhone 15 Plus due to lower demand for the iPhone 14 and its “Plus” variant.
  • Even if Apple does not have to lower its prices, the decline in manufactured volumes should also lead to a drop in sales and EPS figures in FY2023.
  • Apple’s stock is currently being traded at a significant premium compared to its 2016 and 2019 multiples, ranging from 15-30% depending on the specific multiple used for comparison.
  • My DCF simulations supports this – Apple appears too expensive [~12% premium] even with fairly optimistic consensus forecasts.
  • So I remain Neutral and set a price target of $110 per Apple share sometime in 2023. And the ugly-looking Apple’s stock chart concurs with my thesis.

Heartbeat line on red apple and stethoscope, healthy heart diet concept

udra

Introduction

I have been covering Apple Inc. (NASDAQ:AAPL) stock here on Seeking Alpha since mid-December 2021. I have remained Neutral ever since, constantly saying that despite the apparent moat and free cash flow (“FCF”) generation that the company has

Author's Excel calculations, Seeking Alpha data

Author’s Excel calculations, Seeking Alpha data

Argus Equity Research, AAPL, author's notes

Argus Equity Research, AAPL, author’s notes

Seeking Alpha, AAPL's Valuation, author's notes

Seeking Alpha, AAPL’s Valuation, author’s notes

Stratoshere.io, author's inputs

Stratoshere.io, author’s inputs

Stratoshere.io, author's inputs

Stratoshere.io, author’s inputs

TrendSpider, AAPL weekly, author's notes

TrendSpider, AAPL weekly, author’s notes


Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


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