The intrinsic value of Apple Inc (AAPL) can be calculated using various methods, such as the Discounted Cash Flows (DCF) model, the Free Cash Flow to Equity (FCFE) model, or the Relative Valuation model.
1. DCF Model: This model estimates the value of an asset based on the expected future cash flows generated by the asset. In the case of AAPL, the DCF model calculates the present value of future cash flows in the initial 10-year period and then estimates the Terminal Value based on the growth rate and other factors.
2. FCFE Model: This model calculates the intrinsic value of a company by estimating the present value of future free cash flows generated by the company. In the case of AAPL, the FCFE model takes into account the company's expected free cash flows and estimates the intrinsic value based on the discount rate.
3. Relative Valuation Model: This model compares the target company's financial ratios and valuation multiples to those of similar publicly traded companies in the same industry. In the case of AAPL, the relative valuation model looks at the company's price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio to estimate its intrinsic value.
Overall, the intrinsic value of AAPL is estimated by taking the average of these two methods.
10/19/2023 11:05am
