Apple Inc.

Apple Inc. (NASDAQ: APPL) develops, manufactures, and sells smartphones, tablets, wearables, accessories and a wide variety of connected services. APPL’s product range comprises iPhone, Mac, iPad, Wearables, Home, and Accessories. Its clients are mainly consumers, small and medium-sized companies, education, enterprise, and government sectors.

Why Should Investors Book Profit?

• Weak Liquidity Profile: The company's current ratio at the end of Q1FY22 is 1.04x, compared to the industry median of 1.77x. This implies relatively lackluster liquidity profile against the industry median.
• Leveraged Balance Sheet: The company is more exposed to balance sheet risk than its peers, with a Debt/Equity ratio of 1.71x as of December 31, 2021, compared to the industry norm of 0.12x. Furthermore, its long-term debt-to-total-capital ratio was 54.8%, compared to the industry average of 18.2% for the same period. These leveraged financials put the corporation at risk of huge swings due to the slightest adjustment in interest rates.
• Technical weakness: On daily price chart, AAPL shares is topping-out and leading momentum indicator 14-day RSI recorded a reversal and hovering in a neutral zone, implies weak momentum. Also, MACD has recorded a reversal on daily price chart and started falling. Also, AAPL stock has recorded two consecutive red candles after its recorded on DOJI Candle on February 09, 2022.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

APPL's share price has inclined 39.77% in the past nine months and is currently leaning towards the higher band of the 52-week range of USD 116.21 to USD 182.94. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 146.50. Considering the company's highly leveraged balance sheet, weak liquidity profile, current valuation and associated risks. we recommend a "Sell" rating on the stock at the current price of USD 171.59, down 0.31% as of February 11, 2022, at 10:12 AM ET.       

Three-Year Technical Price Chart (as of February 11, 2022, at 10:12 AM ET). Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

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