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Technology Stocks : Apple Inc.

AAPL 270.37

-0.4%

Oct 31 9:30 AM EST

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To: XoFruitCake who wrote (132552)	4/30/2012 2:17:23 PM
From: slacker711	1 Recommendation Read Replies (2) of 213172

Right now look like Apple is going to make some where between $42 to 48 range for fiscal 12 (depending if one is bullish or semi-bearish in the next couple quarter) so Apple is trading around 12x to 14x P/E for current FY. I think you are low on your range. While I think you have made a decent case on the sequential decline in iPhone units, I see little reason to believe that Apple has suddenly given accurate gross margin guidance. That wasnt true even in the October quarter when unit sales came in below market expectations. Going back to valuation, I dont think that a PE ratio captures Apple's valuation when cash makes up such a significant portion of their valuation. The ex-cash PE on FY 2012 analyst estimates is right around 10. If Apple's shareprice were to stagnate for the next year, that number would drop to around 7.5 (using a rough estimate of cash and analyst estimates). Maintaining an ex-cash PE of 10 would put Apple around 700 next year. A fairly good return considering what I consider to be the conservative nature of the analyst estimates. Slacker

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