Dear Reader,
I will try to value Apple Inc., the famous maker of IPhones and the most valuable company in the world by market capitalization.
Currently Apple is valued at 898.40 billion USD market capitalization. A truly staggering sum. The stock price is 174.97 USD. Is Apple Inc. correctly valued?
Basically, It depends!
If the global economy continues growing above 3% measured by world GDP growth year on year, Apple is even slightly undervalued. Apple's Price-to-Earnings ratio is 19.05, which is above the average forward S&P 500 Price-to-Earnings ratio for the last 20 years at 17. If the global economy continues growing above 3% I think the price for Apple should be 15% higher than the current 174.9 USD or 201.215 USD. As the global economy grows people will become more affluent and be able to afford Apple's pricier products.
However, if there is a global recession, defined by two consecutive quarters of growth and world GDP falls by more than 3% for a calendar year Apple is circa 20% overvalued or Apple's stock price should be 139.976 USD. In a recession people are more price sensitive and Apple's luxuriously priced products will not be highly demanded.
My opinion? I think Apple's stock is 10% undervalued currently. Apple's stock should be trading at
192.467 USD.
Otherwise, I think US stocks measured by the main indices will continue going higher for the next 2-3 years.
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Kind regards,
Petar Posledovich
Stocks valuations, analysis. Unbiased. Insightful. Property of Wolfteam Ltd., www.wolfteamedge.com If you find the blog useful, LINK TO www.posledovich.blogspot.com Stocks, Bitcoin, Cryptocurrencies, AI, analysis, insights. CLICK ADVERTISEMENTS, SHARE ON SOCIAL NETWORKS! Technology, Bitcoin, AI, company strategy, stocks analysis. Stocks, crypto involve high RISK! Nothing on this blog is meant or should be construed as investment recommendation to buy or sell securities or their derivatives!
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