Early Thoughts on Tariff Impact on Apple’s Financials, Apple Valuation Update
Hello everyone.
Apple reports earnings on May 1st. We will go over my detailed earnings expectations early next week.
To tie up a few loose ends that are still outstanding on the tariff front, there is value in going over my early thoughts on how tariffs will impact Apple’s financials over the next few quarters.
After what seemed to be a good two to three years of noisy Apple quarters coming out of the pandemic, there were expectations that the second half of 2024 and 2025 would provide a cleaner look at Apple’s underlying business fundamentals. Given the various moving pieces related to tariffs, Apple's FY2025 may turn out to be a noisy year from a financials perspective.
Let’s jump in for more discussion.
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Nikkei Asia Stokes Apple Demand Fears, AAPL Valuation Update, AAPL Stress Test Scenarios
Today's Above Avalon daily update includes the following stories:
Nikkei Asia Stokes Apple Demand Fears
AAPL Valuation Update
AAPL Stress Test Scenarios
In today's update, we will tackle additional questions that came in from members over break. The first topic is related to Nikkei Asia's article on Apple product demand. We will then turn to AAPL volatility. The discussion includes a broader examination of Apple’s current valuation metrics based on both earnings and free cash flow. We also go over various stress test scenarios involving different EPS and forward P/E multiples.
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If it is of interest to Apple, it is something I pay attention to.
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Apple Shifting Device Production Orders, U.S. Election Implications on Apple and Big Tech, Revising My Apple 2022 Estimates
Today's Above Avalon daily update includes the following stories:
Apple Shifting Device Production Orders
U.S. Election Implications on Apple and Big Tech
Revising My Apple 2022 Estimates
We begin today’s email with a new report out of Nikkei Asia regarding Apple’s strategy for countering chip shortages. The strategy involves reconfiguring production orders. We then turn our attention to politics and how yesterday’s U.S. elections can be thought of in terms of impacts on Apple (and Big Tech). The update concludes with a look at my revised Apple financial estimates for 2022 following Apple’s 4Q21 earnings and 2021 10-K. Links to my updated Apple earnings model are included.
Above Avalon membership is required to read this daily update. Members can read the update here.
Above Avalon Membership
Above Avalon members receive the full Above Avalon experience throughout the week.
The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Daily updates are 2,000 words and sent via email Monday through Thursday. Updates revolve around the following topics:
Apple business and strategy analysis.
Neil’s perspective and observations on current news and Apple competitors.
Neil’s Apple financial estimates.
Full coverage of Apple earnings, product events, and keynotes.
If it is of interest to Apple, it is something I pay attention to.
Member Privileges and Benefits
Receive Exclusive Daily Updates. The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Each email is 2,000 words and includes Neil’s analysis and perspective on the most important stories and news impacting Apple. Unlike other paid emails that may sporadically talk about Apple, every Above Avalon daily update is focused on Apple. New updates are sent Monday through Thursday. Approximately 200 daily updates published throughout the year. Sample daily updates can be viewed here, here, and here. Members have the option of receiving a consolidated weekly version of the daily updates. In addition, an RSS feed is available for members. The daily updates can also be consumed in audio via the Above Avalon Daily podcast (available to members as an add-on feature).
Access Reports and Neil’s Earnings Model. Members have access to Above Avalon reports, which are in-depth examinations of Apple's business and financial strategy. Each report is 4,000 to 5,000 words and covers one Apple topic. Members also have access to Neil’s working Apple earnings model (an Excel file that also works in Numbers). The model is fully functional and adjustable with the ability to alter earnings drivers. Reports and Neil’s earnings model are available to members at no additional cost.
Email Priority. Receive priority when it comes to having email questions and inquiries answered. Neil personally answers all inquiries, including any customer service matters related to your membership.
Archive Access. Read more than 1,100 daily updates and five reports that have been previously sent to members. The Above Avalon member archive is unmatched in the marketplace in terms of the sheer amount of Apple analysis found in one location. The daily updates archive can be viewed here while the reports archive is available here.
Member Forum Access. Join other Above Avalon members in an active forum containing in-depth discussion and debate. While most private member forums have limited participation, the Above Avalon member forum has become known as one of the more vibrant private communities dedicated to Apple. Members live in 55 countries and hold a diverse range of backgrounds and occupations. There is a specific forum channel for members to share AAPL stock and options trading strategies. Neil moderates and participates in the forum. The forum is run through Slack and can be accessed here.
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