Thu Erns Watch: Apple, Google, Amazon, Facebook…

Equities 4 minutes to read

Kay Van-Petersen

Global Macro Strategist

Summary:  Erns Watch aims to highlight some of the key names that are in heavy rotation on investors' radars.


(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Thu Earnings Watch: Amazon, Apple, Google, Facebook... 

 

Overview

Amazon: $3034 Last, $1.5trn Mkt Cap, +64% YTD,  P/E 80x, 2Q Est. +$5.46 EPS, Rev $81.2bn

  • The Goliath Amazon, is just staggering from a law of large numbers perspective – be it, its 1.5 trillion market cap, its expected +$81.2bn in revenue for the quarter i.e. not even year, the vast majority of S&P 500 companies likely need a minimum of several years to match one quarter of Amazon’s revenues.

  • The 12m consensus price target is c. $3097 in-line with the current $3034 share price, with a range of with a range of  $3800 to $1840.

  • Analysts have a c. 91% buys in the name, vs. 2% sells with the balance being holds at 7%. Even in a WS world that is skewed towards buys, that is pretty astonishing…

  • The name is up c. +64% YTD, with a +81% jump from the Mar lows of $1677.

  • The company was last sitting on about $50bn in C&E, with about $20bn in FCF generation – again just staggering numbers. With Amazon having more cash on its BS than the entire market cap of Spotify.

  • 1yr earning growth are expected to be +59% for 2021 (-2.3% for 2020). For 2Q earnings, Est. +$5.46 EPS, Rev $81.2bn

  • Link to 1st quarter results

  • Amazon [AMZN] results should be out after the US markets close today
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Apple: $380 Last, $1.6trn Mkt Cap, +30% YTD,  P/E 25x, 3Est. +$2.07 EPS, Rev $52.3b

  • The Leviathan Apple with equal staggering numbers, a little over half of 100bn in revenue expected for this quarter and actually packing a market cap a touch above Amazon.

  • The 12m consensus price target is c. $375 in-line with the current $380 share price, with a range of with a range of  $450 to $240. Analysts have a c. 66% buys in the name, vs. 11% sells with the balance being holds at 23%.

  • The name is up c. +30% YTD, with a +70% jump from the Mar lows of $224.

  • The company was last sitting on about $193bn in C&E, with about $67bn in FCF generation.

  • One thing that KVP has yet to understand, is why we don’t see more activist corporate raiders in tech, i.e. they are sitting on so much cash, generate tons of cashflows, they can service a lot of debt - & debt has never been cheaper & is only going to get cheaper.

  • Yes, I get it that traditionally you needed fixed assets as collateral, yet C19 has shown that generally speaking its actually the intangible service oriented brands that have thrived the most.

  • Maybe the Macro Dragon should put together a syndicate to take-over Apple? Here is a multi-trillion dollar idea, someone should do a SPAC on this theme.

  • 1yr earning growth are expected to be +20% for 2021 (+4.9% for 2020). For 3Q earnings, Est. +$2.07 EPS, Rev $52.3bn

  • Link to previous quarterly results. (note, apple’s quarterlies are not fiscal calendar)

  • Apple [AAPL] results should be out after the US markets close today

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Google: $1522 Last, $1.0trn Mkt Cap, +14% YTD,  P/E 27, 2Q Est. $10.92 EPS, Rev $30.5bn

 

  • Yes, yes… technically Alphabet… yet the majority of the time that confuses people, as you get a “you mean google!”. So Google just makes it into the Trillion Dollar club.

  • The 12m consensus price target is c. $1605 which is a little higher than the current $1522 share price, with a range of with a range of  $1725 to $1425. Analysts only have a buy rating (100%) in the name. Yep, yep… even in a WS world that is skewed towards buys, that is pretty astonishing…

  • The name is up c. +14% YTD, with a +44% jump from the Mar lows of $1057.

  • The company was last sitting on about $117bn in C&E, with about $29bn in FCF generation – there was a time Google could easily have lifted Tesla back when TSLA market cap was in the $20-50bn range… today its at $280bn, implying that google would have to go out & finance the rest of the purchase, which would be a non-issue with that FCF number.

  • 1yr earning growth are expected to be +59% for 2021 (-2.3% for 2020). For 2Q earnings, Est. +$10.92 EPS, Rev $30.5bn

  • Link to previous quarterly results.

  • Google [GOOG] results should be out after the US markets close today

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Facebook: $233 Last, $665bn Mkt Cap, +14% YTD,  P/E 24, 2Q Est. $1.77 EPS, Rev $17.3bn

  • Ah Facebook or as KVP likes to call it, Zuck’s Book – the social media company that “everybody” hates, yet “everybody” still uses, be it through FB, Messenger, WhatsApp or Instagram. The social media company that wants the best of both worlds, to compete in media vs. says traditional platforms, yet not to be held by the same rules – i.e. accountability for the waterfall & hugely destabilizing effects of the content on their portals.

  • The day Zuck & Sherly step down, this stock is likely going to do +10% to 25% in a session – that’s how deflationary & out of touch these “key” executives have been on the name.

  • Also FB is likely a situation where the SOTP > the blob. I.e. imagine if Google spun out U-tube? Or FB spun out Instagram. Yes, once again – calling for the activist investors, c’mon Carl this puppy is not even in the trillion dollar club, fire up the G6, put a call into Mnuchin, lets takeover this baby & split it up. You will be hailed as a patriot & savior of the American election system, in addition to enhancing the full potential valuation in FB’s assets.

  • The 12m consensus price target is c. $260 in-line with the current $233 share price, with a range of with a range of  $315 to $180. Analysts have a c. 85% buys in the name, vs. 6% sells with the balance being holds at 9%.

  • The name is up c. +14% YTD, with a +60% jump from the Mar lows of $233.

  • The company was last sitting on about $60bn in C&E, with about $23bn in FCF generation.

  • 1yr earning growth are expected to be +31% for 2021 (-15% for 2020). For 2Q earnings, Est. $1.77 EPS, Rev $17.3bn

  • Link to previous quarterly results.

  • Facebook [FB] results should be out after the US markets close today

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Start-to-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way

KVP

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