FMP
May 20, 2024 12:49 PM - Davit Kirakosyan
UBS analysts, focusing on iPhone demand, reported this week that data suggests a flat iPhone cycle for Apple (NASDAQ:AAPL). Prior to and following Apple's recent quarterly earnings report, the market began to anticipate a recovery in iPhone unit demand, spurred by enthusiasm around AI as a positive factor. UBS noted that the market expects AI capabilities and functionalities announced at WWDC in June to drive a refresh cycle. This shifted sentiment from cautious in early April to much more optimistic by mid-May.
Despite this improved sentiment, UBS's supply chain checks, including iPhone build rates, along with an analysis of Apple's inventory and manufacturing purchase obligations, indicate a prolonged challenging demand environment and a subdued cycle. Recent checks suggest iPhone procurement for 2024 to be between 218-227 million units, slightly up from 2023 but below the build rates of 2021 and 2022.
Additionally, by the end of March 2024, Apple's inventory and MPOs were $40.4 billion, down 16% year-over-year, or about 14% of the projected next 12-month Product revenue estimate.
Therefore, UBS forecasts iPhone revenue to increase by 4% in the September and December quarters combined (compared to the consensus of 2% growth). However, they believe a strong iPhone 16 cycle is unlikely despite the AI enthusiasm leading up to WWDC.
Oct 31, 2023 8:03 AM - Parth Sanghvi
Free cash flow to the firm (FCFF) and free cash flow to equity (FCFE) are two of the most important metrics used in financial modeling. Both metrics measure the amount of cash that is available to a company's shareholders and creditors, but there is a key difference between the two. FCFF measures...
Nov 25, 2023 6:39 AM - Parth Sanghvi
Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...
Dec 23, 2023 2:19 AM - Parth Sanghvi
Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...