Apple (AAPL) short, mcap=$2299bn

AAPL short pitch:
– One of the best short opportunities for 2023.
– Very little risk to the upside – a short you can sleep well at night.
– Going from a massive pull forward in product sales into a recession year.
– Earnings multiple is still near the highest it’s ever been relative to S&P500.
– Apple’s service revenues are built on monopolistic behavior that is expected to eventually fade away.
– Ultimately, what will drive earnings in the foreseeable future are still Product Sales, which are set to contract in the coming years.
– DOJ/Google lawsuit and EU Digital Market Act might also be significant headwinds into 2024.

AAPL valuation:

– AAPL will generate less than $6 in EPS in 2023 and 2024.
– PE multiple expected to contract from the current 22x.
– With $5.2 2024 EPS and 18x multiple, Apple is a $94 stock.

Exp. gain: +30% to $94/share by 2024.

Full write-up (free guest account required):