Apple Inc.

Apple Inc. (NASDAQ: AAPL) creates, produces, and sells smartphones, tablets, wearables, and accessories, as well as several connected products. I Phone, Mac, iPad, Wearables, and home accessories are among the company's top offerings. Apple Inc. is the biggest company in the world as per the market capitalization.

Key Highlights

• The company reported YoY growth of 28.63% in total revenue to USD 378.3 billion in FY21 (ended December 25, 2021) compared to USD 294.1 billion in FY20.
• AAPL’s net income increased to USD 100.6 billion in FY21 from USD 63.9 billion in FY20, which is a massive growth of 57.3% YoY meaning improvement in operating and costing efficiency.
• As of December 31, 2021, the company had cash and cash equivalents of USD 63.9 billion which has reduced from USD 76.8 billion YoY.
• Apple debt to equity ratio (1.71x) remained almost same from the last year but it is very high compared to the industry average of 0.27x.
• Apple has a competitive advantage in terms of Net margins having a margin of 27.9% compared to industrial average of mere 6.3%, meaning good product pricing and cost control.
• The stock has broken short term (50-day) SMA support level and retesting it, while the long term (200-day) SMA support is at US$ 158.77. This means small correction is expected in near term.
• Recently, in March 2022, Apple announced that it would be halting sales in Russia, following its invasion of neighboring Ukraine. Management said that they will continue to evaluate the situation and are in communication with relevant governments on the actions they are taking.
• A Prolonged War in Ukraine could affect the semiconductor supply chain and company might have to cut productions.

Conclusion

Considering positive last year financials except poor debt to equity ratio in a rising interest rate environment, range bound technical and awaited quarterly result report on 28^th April. We recommend a "Watch" rating on the stock at the closing price of USD 167.23, as of April 20, 2022.

Technical Price Chart (as on April 20, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical analysis summary

*Closing price as of April 20, 2022

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.

Disclaimer

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