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Apple Inc AAPL

Morningstar Rating
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Stock XNAS Rating as of
$214.29 −2.38 (1.10%)
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As of Delayed Price Closed
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Company Report

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Apple: Generative AI Announcements Fit With Our Expectations and We Maintain Our Valuation

William Kerwin

We maintain our $170 fair value estimate for shares of wide-moat Apple after we viewed the opening keynote of its worldwide developers' conference positively and in line with our expectations. Apple unveiled long-awaited generative AI features, grouped under the moniker Apple Intelligence. After seeing the features, we continue to have confidence in a strong iPhone upgrade cycle in fiscal 2025, and we make no changes to our forecast or valuation. Customers will need an iPhone 15 Pro model or better to make full use of Apple Intelligence, which should drive new sales and upgrades, in our view. Apple also announced upgrades across its device operating systems, within which we liked the focus on customization and privacy. Apple shares had a tepid reaction to the keynote, which suggests to us that generative AI and upgrade cycle expectations were baked in to share prices. We see shares as moderately overvalued at current levels.

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Price vs Fair Value

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AAPL is trading within a range we consider fairly valued.
Price
$214.29
Fair Value
$439.00
Uncertainty
Medium
1-Star Price
$632.60
5-Star Price
$697.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Apple offers an expansive ecosystem of tightly integrated hardware, software, and services, which locks in customers and generates strong profitability.

Bears

Apple is prone to consumer spending and preferences, which creates cyclicality and opens the firm up to disruption.

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Trading Information

Previous Close Price
$216.67
Day Range
$213.00–218.63
52-Week Range
$164.08–220.20
Bid/Ask
$214.00 / $214.02
Market Cap
$3.29 Tril
Volume/Avg
79.9 Mil / 65.2 Mil

Key Statistics

Price/Earnings (Normalized)
33.33
Price/Sales
8.77
Dividend Yield (Trailing)
0.45%
Dividend Yield (Forward)
0.47%
Total Yield
2.94%

Company Profile

Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple’s iPhone makes up a majority of the firm sales, and Apple’s other products like Mac, iPad, and Watch are designed around the iPhone as the focal point of an expansive software ecosystem. Apple has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple’s sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution.
Sector
Technology
Industry
Consumer Electronics
Stock Style Box
Large Core
Total Number of Employees
161,000
Website
https://www.apple.com

Competitors

Valuation

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Metric
AAPL
005930
GOOGL
Price/Earnings (Normalized)
 33.3327.6026.75
Price/Book Value
 44.301.507.40
Price/Sales
 8.771.786.96
Price/Cash Flow
 27.789.1419.29
Price/Earnings
AAPL
005930
GOOGL

Financial Strength

Metric
AAPL
005930
GOOGL
Quick Ratio
 0.871.781.98
Current Ratio
 1.042.552.15
Interest Coverage
 —15.09285.78
Quick Ratio
AAPL
005930
GOOGL

Profitability

Metric
AAPL
005930
GOOGL
Return on Assets (Normalized)
 32.12%4.72%25.77%
Return on Equity (Normalized)
 165.09%6.10%36.64%
Return on Invested Capital (Normalized)
 62.77%4.99%32.10%
Return on Assets
AAPL
005930
GOOGL
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Consumer Electronics Industry Comparables

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1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Sony Group Corp
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—Wtyv$97.8 Bil
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RwjnmgjgXfpl$97.8 Bil
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PCRFF
—Qdf$18.8 Bil
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—Tmbs$4.0 Bil
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SHCAF
—Sqb$4.0 Bil
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LPL
—Qjc$3.7 Bil

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