“We expect Apple to see modest iPhone revenue growth in the long run, driven by the ASP increases,” Trefis Team and Great Speculations write. “Apple’s margins could also see some upside in the medium term due to multiple reasons. For one, Apple has been driving significant growth in its high-margin services business… Separately, the company could also see some tailwinds in the near term due to declining semiconductor prices.”
“Overall, Apple looks undervalued at the moment following the stock declines. The company currently trades at a forward P/E of just 13x (under 12x adjusted for net cash) based on our FY’19 EPS projection of $13.70 and the current market price of $177 per share as of Tuesday’s close,” Trefis Team and Great Speculations write. “Apple’s aggressive share repurchases are also another factor that will power EPS growth, with the company spending more than $70 billion in FY’18 on buybacks.”
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