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AAPL – Market expectations are for Uniform ROA to expand, but management appears concerned about dividend raises, international performance, and Apple Services

May 28, 2021

  • Apple Inc. (AAPL:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 21.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management appears concerned about dividend increases, international performance, and their Services business
  • Specifically, management may lack confidence in their ability to maintain their performance in China and continue to raise their dividend. Furthermore, they may be overstating the iPhone 12’s 5G capabilities, Find My network’s effectiveness with third-party products, and the potential of Apple Card Family credit card sharing. Moreover, management may lack confidence in their ability to ensure user data privacy, sustain paid Apple TV+ subscriber growth, and maintain the momentum of the Services business. Finally, they may be overstating their focus on environmental goals and the sustainability of iPhone’s leadership position