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
    -

 

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

    -

 

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

    -

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

-

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

This is the way

KVP

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed here or within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.