Company Update
June 9, 2015
R
IT HARDWARE & SOFTWARE
Brian J. White, CFA
212-610-2416
briwhite@cantor.com
Equity Research
Isabel Zhu
212-294-8016
izhu@cantor.com
Apple Inc. (AAPL-$127.80)
Rating: BUY
Target Price: $195.00
WWDC Highlights - Enhancing and Expanding the Reach Of "Planet Apple"
REV
2015E
2016E
2017E
1Q
74.6A
81.1E
85.8E
2Q
58.0A
62.8E
68.3E
3Q
49.5E
57.2E
61.1E
4Q
53.8E
57.7E
63.4E
EPS
2015E
2016E
2017E
1Q
3.06A
3.24E
3.58E
2Q
2.33A
2.45E
2.78E
3Q
1.75E
2.09E
2.32E
4Q
1.78E
1.99E
2.28E
FY
REV
EPS
P/E
2015E
235.8E
8.94E
14.3x
2016E
258.8E
9.78E
13.1x
2017E
278.6E
10.98E
11.6x
Investment Summary: Yesterday, we attended Apple's opening keynote at the
Worldwide Developers Conference (WWDC) that supports our view that investors
need to start thinking more boldly about Apple. The keynote focused on new software
and service innovations, including the introduction of Apple Music, an update of OS
X (El Capitan), the unveiling of iOS 9 and the announcement of watchOS 2. Not
a single hardware product was introduced. We believe Apple's digital ecosystem is
often under appreciated, operating in the shadow of the company's mobile device
portfolio. Once again, in our view, the market appears to be running scared as it
relates to Apple, yet we believe the company's future prospects have never been
brighter and the stock is trading at just over 10x our CY:16 EPS projection (ex-cash).
■
Note:�Revenue�figures�are�in�billions.
■
■
■
Apple Music Unveiled and Jimmy Iovine Takes to the Stage. First off, Apple
unveiled its first streaming music service with Apple Music that will debut on
June 30 in over 100 countries with a monthly subscription fee of $9.99. At last
count, Apple had over 800 million iTunes accounts and we believe Jimmy Iovine
further expands Apple's credibility with musicians.
Expecting Apple Watch App Improvements with watchOS 2. Apple also
previewed watchOS 2 that allows developers to finally create native apps for
Apple Watch and is available as a free update this fall. In our view, watchOS
2 was an important announcement in terms of improving the user experience
around the Apple Watch and opening up opportunities for totally new use cases.
Today, developer apps are not native to the Apple Watch, thus creating timing
issues for certain apps. However, yesterday's announcement changes the game,
allowing developers to tap into key Apple Watch innovations and software APIs.
iOS 9 Unveiled with Improved iPad Support and More Apple Pay. Apple
also unveiled iOS 9 (available as a free update this fall) with higher levels of
intelligence, new multi-tasking features for the iPad, new transit information
for Maps, the News app, expanded features for Apple Pay and more. In our
view, new features for the iPad such as Slide Over, Split View and Picture-inPicture set the stage for the 12.9-inch "iPad Pro" that we expect to be launch over
the next 6-10 months. Additionally, Apple Pay expanded its reach with Apple
announcing plans to support store-issued credit and debt cards and support for
a merchant driven rewards programs. Also, Apple announced plans to launch
Apple Pay in the UK next month.
Valuation: Our 12-month price target to $195.00 is based on 17x our CY:16 pro
forma EPS estimate (adjusted for other income), plus Apple’s $25.65 net cash
per share.
Current Statistics
Market Cap ($Mil)
Shares Out (Mil):
Dividend Payout:
Dividend Yield:
$745,700.2
5,834.900
2.08
1.63%
The Disclosure Section may be found on pages 11 - 12.
Debt-to-Capitalization Ratio:
Net Cash per Share:
Tangible Book Value Per Share:
25.40
$25.65
$20.61
June 9, 2015
Yesterday, we attended Apple's opening keynote at the Worldwide Developers Conference
(WWDC) in San Francisco and we walked away pleased with solid enhancements to the
company's digital matrix that we believe continues to be a major competitive advantage for
Apple. In our view, yesterday's announcements provide consumers with more reasons to buy
an iPhone, an iPad, a Mac and an Apple Watch.
This was the 26th anniversary of Apple’s WWDC, which began in 1990 with just 1,300
developers. This year, attendees came from seventy countries and 80% were first-time
attendees. Given time constraints at this year's keynote with a plethora of ground to cover, Apple
slimmed down the number of updates at this year's event. As part of this "mini update", Tim
Cook (CEO) indicated that "everything is going great". Furthermore, Apple announced that the
App Store has paid out $30 billion to developers since its launch seven years ago and recently
passed 100 billion app downloads.
The keynote focused on new software and service innovations, including the introduction of
Apple Music, an update of OS X (El Capitan), the unveiling of iOS 9 and the announcement
of watch OS 2. As we indicated in our WWDC preview this week, we did not expect an Apple
TV streaming service (nor set-top box) to be announced yesterday but we believe an unveiling
is possible in the fall if Apple is successfully able to negotiate deals with the networks. Not a
single hardware product was introduced at the event. In our view, Apple's digital ecosystem is
often under appreciated, operating in the shadow of the company's mobile device portfolio. That
said, Apple clearly highlighted to us that its digital matrix is rapidly expanding and extending
its reach beyond traditional mobile devices. With the stock trading at just over 10x our CY:16
EPS estimate (ex-cash), we reiterate our BUY rating on the stock.
Apple Music Unveiled and Jimmy Iovine Takes to the Stage
First off, Apple unveiled its first streaming music service with Apple Music that will debut on
June 30 in over 100 countries with a monthly subscription fee of $9.99 (a family plan of $14.99
per month for up to six family members) and free for the first three months. At last count,
Apple had over 800 million iTunes accounts, and we believe Jimmy Iovine (from the Beats
deal) further expands Apple's credibility with leading musicians. On June 30, Apple Music will
be available on the iPhone, iPad, iPod touch, Mac and PC, while Apple TV and Android phones
will have access this fall.
Apple Music is a single app that includes the following: (1) a streaming music service with a
catalog of over 30 million songs and human curation to create playlists for the user, combined
with help from Siri in finding songs; (2) a global (over 100 countries), 24-hour live radio station
called Beats 1 with influential DJ's in Los Angeles, London and New York; and (3) a network
called Connect, allows artists to interact (share lyrics, videos, etc) with fans, while fans can
provide commentary about the artist.
In May 2014, the Financial Times reported that Apple was in late-stage talks to acquire Beats
for approximately $3.2 billion and initially there was skepticism in the market around the logic
behind the deal. Apple announced the transaction shortly thereafter and closed the deal last
year. In our view, Beats Music played a role in helping Apple unveil Apple Music, and Jimmy
Iovine's participation in the keynote supports this view. Although Beats is well known for its
premium-priced headsets over the years, we indicated when the Financial Times article was
penned that Apple may be interested in Beats Music, which was launched in the U.S. market
in January 2014. At the time, Beats Music had acquired Topspin Media, a company that helps
artists promote themselves. With over 20 million tracks under the Beats Music umbrella, no
ads, high audio quality, and a very creative user interface, Beats Music had marketed itself
as "the first music service that understands you." Previously known as "Project Daisy," Beats
Music uses proprietary algorithms to offer consumers the appropriate music for their mood.
As described by Beats Music, "Tell Beats Music where you are, what you're feeling and who
you're with and we'll serve you a unique stream of music that fits your situation perfectly." At
the time, we indicated that this feature could also have applications for movies and potentially
2
June 9, 2015
other media. Just over a year ago, a subscription to Beats Music cost $9.99 per month and was
available on iOS, Android, Windows Phone, and on the web, the same price as Apple Music.
Expecting Apple Watch App Improvements with watchOS 2
Apple also previewed watchOS 2 that allows developers to finally create native apps for Apple
Watch and available as a free update this fall. Apple described this update with native apps
as similar to the company's launch of the App Store seven years ago. In our view, watchOS 2
was an important announcement in terms of improving the user experience around the Apple
Watch and opening up opportunities for totally new use cases. Today, developer apps are not
native to the Apple Watch but are tethered via the iPhone, thus creating timing issues for certain
apps. However, we believe yesterday's announcement changes the game, allowing developers
to tap into key Apple Watch innovations such as the Digital Crown, the heart rate sensor, the
Taptic Engine and software APIs. A developer of apps for the iPhone at WWDC indicated to
us that his company should be able to develop a native app for the Apple Watch over the next
couple of months.
Additionally, Apple added new features such as new watch face innovations, Time Travel and
more. We found Time Travel to be an interesting new feature that allows a user to scroll forward
through the day via the Digital Crown, viewing future meetings, future activities, temperature
forecasts, flight reservations and more. Regarding new watch faces, we found the Time-Lapse
watch face the most interesting as it allows users to choose a time-lapse video from London,
New York City or Shanghai that was shot over a twenty four hour period. Unlike the current OS
on Apple Watch, users will be able to respond to Mail through dictation, Smart Replies or emoji.
During our meetings in Taipei last week, the tone around demand trends for the Apple Watch
in the supply chain was disappointing, but we believe that a component issue has severely
held back Apple's ramp schedule (thereby holding back the true sales potential of the new
device). As such, we were very pleased with Apple's announcement last week for Apple Watch
to launch in another seven countries on June 26 and become available in Apple retail stores
in two weeks. Additionally, we believe the development of native apps for Apple Watch is
also a positive development. We continue to believe Apple Watch will prove to be the best
selling new product in Apple's history (within first 12 months).Apple Watch will be available
in Italy, Mexico, Singapore, South Korea, Spain, Switzerland and Taiwan beginning June 26.
Additionally, Apple will begin selling certain Apple Watch models in the Apple Retail Stores
in two weeks. Recall, Apple Watch had originally been scheduled for arrival in Apple Retail
Stores on April 24 and we had expected the company to be well beyond just nine countries in
the ramp process by now.
iOS 9 Unveiled with Better iPad Support and More Apple Pay
Apple also unveiled iOS 9 (available as a free update this fall) with higher levels of intelligence,
new multi-tasking features for the iPad, new transit information for Maps, the News app,
expanded features for Apple Pay, multi-tasking on the iPad and more.
With yesterday's update, Maps for transit will now be supported with iOS 9 across certain cities
in the U.S. and over 300 cities in China. Apple also added a new app called News that tracks
over 1 million topics by tapping into a plethora of leading newspapers, magazines and other
publications. In our view, new features for the iPad such as Slide Over, Split View and Picturein-Picture set the stage for the 12.9-inch "iPad Pro" that we expect to be launch over the next
6-10 months. Furthermore, Apple is adding more health metrics to HealthKit, expanding the
ecosystem around HomeKit and now supporting Apps from automakers with CarPlay. Also,
Apple announced that Swift (programming language) is going open source and developers were
very pleased with this development.
Additionally, Apple Pay expanded its reach with Apple announcing plans to support storeissued credit and debt cards and support for a merchant driven rewards programs. Next month,
Apple expects to have over 1 million locations accepting Apple Pay in the U.S. market and
Discover is on track to launch this fall with approximately 50 million members. Also, Apple
3
June 9, 2015
announced plans to launch Apple Pay in the UK next month with approximately 250,000
locations supporting Apple Pay.
Updates on OS X El Capitan
The updates to the OS X was more modest this year with a focus on experience and performance.
Following on the hot trail of Yosemite that Apple claims achieved the fastest adoption of any
PC operating system ever, Apple announced an OS X update called El Capitan. This update
includes enhancements of window management, built-in apps and Spotlight search. Also, Apple
announced plans to bring Metal to the Mac. OS X El Capitan will be available this fall as a
free download.
Valuation
Our $195.00 price target is based on 17x our CY:16 pro forma EPS estimate (adjusted for other
income), plus Apple’s net cash per share of $25.65. Despite Apple’s more attractive growth
track record than the S&P 500 and our expectation of higher growth rates in the future, the
multiple (prior to cash add-back) that we have used for our valuation is slightly above the S&P
500 P/E multiple; moreover, this multiple is below the company’s historical, straight P/E of
19x since 2007.
Risks
Risks to our price target for BUY-rated Apple include: (1) the health of the economy and
consumer trends; (2) the ability to retain key Apple employees; (3) the ability to broaden the
portfolio through a wider array of price points to expand consumer adoption; (4) the ability
to successfully open up new market opportunities; (5) the ability to navigate litigation with
competitors and potential anti-trust issues; (6) technology trends in the markets of personal
computers, smartphones, tablets, and digital music; (7) competition and pricing pressure across
key Apple product categories; and (8) potential disruption from component supply, labor issues,
and channel inventory.
4
June 9, 2015
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
QUARTERLY INCOME STATEMENT (SEPT)
FY2015E
FY2016E
FY2017E
1QFY15A
74,599.0
29.5%
77.1%
44,858.0
60.1%
29,741.0
39.9%
1,895.0
2.5%
3,600.0
4.8%
24,246.0
32.5%
170.0
24,416.0
32.7%
6,392.0
26.2%
18,024.0
24.2%
2QFY15A
58,010.0
27.1%
-22.2%
34,354.0
59.2%
23,656.0
40.8%
1,918.0
3.3%
3,460.0
6.0%
18,278.0
31.5%
286.0
18,564.0
32.0%
4,995.0
26.9%
13,569.0
23.4%
3QFY15E
49,450.3
32.1%
-14.8%
30,174.4
61.0%
19,275.9
39.0%
2,076.9
4.2%
3,758.2
7.6%
13,440.8
27.2%
350.0
13,790.8
27.9%
3,627.0
26.3%
10,163.8
20.6%
4QFY15E
53,761.6
27.6%
8.7%
33,661.2
62.6%
20,100.4
37.4%
2,204.2
4.1%
4,300.9
8.0%
13,595.2
25.3%
300.0
13,895.2
25.8%
3,654.4
26.3%
10,240.8
19.0%
1QFY16E
81,121.4
8.7%
50.9%
48,591.7
59.9%
32,529.7
40.1%
2,758.1
3.4%
4,948.4
6.1%
24,823.2
30.6%
300.0
25,123.2
31.0%
6,607.4
26.3%
18,515.8
22.8%
2QFY16E
62,842.7
8.3%
-22.5%
37,894.1
60.3%
24,948.5
39.7%
2,325.2
3.7%
4,021.9
6.4%
18,601.4
29.6%
300.0
18,901.4
30.1%
4,971.1
26.3%
13,930.4
22.2%
3QFY16E
57,196.7
15.7%
-9.0%
35,061.6
61.3%
22,135.1
38.70%
2,230.7
3.9%
4,232.6
7.4%
15,671.9
27.4%
300.0
15,971.9
27.9%
4,200.6
26.3%
11,771.3
20.6%
4QFY16E
57,682.0
7.3%
0.8%
35,993.6
62.4%
21,688.4
37.6%
2,307.3
4.0%
4,556.9
7.9%
14,824.3
25.7%
300.0
15,124.3
26.2%
3,977.7
26.3%
11,146.6
19.3%
1QFY17E
85,803.8
5.8%
48.8%
50,967.4
59.4%
34,836.3
40.6%
2,831.5
3.3%
5,234.0
6.1%
26,770.8
31.2%
300.0
27,070.8
31.5%
7,119.6
26.3%
19,951.2
23.3%
2QFY17E
68,278.2
8.6%
-20.4%
40,830.4
59.8%
27,447.8
40.2%
2,526.3
3.7%
4,369.8
6.4%
20,551.7
30.1%
300.0
20,851.7
30.5%
5,484.0
26.3%
15,367.7
22.5%
3QFY17E
61,071.0
6.8%
-10.6%
37,253.3
61.0%
23,817.7
39.0%
2,320.7
3.8%
4,519.3
7.4%
16,977.7
27.8%
300.0
17,277.7
28.3%
4,544.0
26.3%
12,733.7
20.9%
4QFY17E
63,438.9
10.0%
3.9%
39,395.5
62.1%
24,043.3
37.9%
2,474.1
3.9%
5,011.7
7.9%
16,557.5
26.1%
300.0
16,857.5
26.6%
4,433.5
26.3%
12,424.0
19.6%
Pro-Forma EPS
Y/Y % Change in Pro-Forma EPS
$3.06
47.9%
$2.33
40.1%
$1.75
37.0%
$1.78
25.4%
$3.24
5.6%
$2.45
5.4%
$2.09
19.0%
$1.99
11.8%
$3.58
10.7%
$2.78
13.4%
$2.32
11.2%
$2.28
14.6%
EPS (ex-Stock-Based Compensation Expense)
Y/Y % Change in EPS (ex-Stock-Based Comp.)
$3.18
47.6%
$2.44
40.0%
$1.87
36.8%
$1.90
25.6%
$3.36
5.8%
$2.58
5.5%
$2.21
18.1%
$2.11
11.4%
$3.71
10.5%
$2.91
13.0%
$2.45
10.9%
$2.41
14.0%
GAAP EPS
Shares Outstanding - Diluted
Source: Cantor Fitzgerald estimates, Company data
$3.06
5,881.8
$2.33
5,834.9
$1.75
5,796.4
$1.78
5,757.9
$3.24
5,719.4
$2.45
5,680.9
$2.09
5,642.4
$1.99
5,603.9
$3.58
5,565.4
$2.78
5,526.9
$2.32
5,488.4
$2.28
5,449.9
Revenue
Y/Y Growth %
Q/Q Growth %
Cost of Sales
% of Revenue
Gross Profit
Gross Margin %
Research & Development Expenses
% of Revenue
Selling, General & Administrative Expenses
% of Revenue
Operating Income
Operating Margin %
Other Income
Earnings Before Income Taxes
% of Revenue
Income Tax Expense
Income Tax Rate
Net Income
Net Margin %
5
June 9, 2015
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
QUARTERLY INCOME STATEMENT (SEPT)
Revenue
Y/Y Growth %
FY2013
FY2014 FY2015E FY2016E FY2017E CY2013 CY2014 CY2015E CY2016E
170,910.0 182,795.0 235,821.0 258,842.8 278,591.8 173,992.0 199,800.0 242,343.4 263,525.2
9.2%
7.0%
29.0%
9.8%
7.6%
5.7%
14.8%
21.3%
8.7%
Cost of Sales
% of Revenue
Gross Profit
Gross Margin %
Research & Development Expenses
% of Revenue
Selling, General & Administrative Expenses
% of Revenue
Operating Income
Operating Margin %
Other Income & Expense
Income Before Provision for Income Taxes
% of revenue
Income Tax Expense
Income Tax Rate
Net Income
Net Margin %
106,606.0
62%
64,304.0
37.6%
4,475.0
2.6%
10,830.0
6.3%
48,999.0
28.7%
1,156.0
50,155.0
29.3%
13,118.0
26.2%
37,037.0
21.7%
112,258.0
61%
70,537.0
38.6%
6,041.0
3.3%
11,993.0
6.6%
52,503.0
28.7%
980.0
53,483.0
29.3%
13,973.0
26.1%
39,510.0
21.6%
143,047.6
61%
92,773.3
39.3%
8,094.1
3.4%
15,119.2
6.4%
69,560.0
29.5%
1,106.0
70,666.0
30.0%
18,668.4
26.4%
51,997.6
22.0%
157,541.0
61%
101,301.8
39.1%
9,621.3
3.7%
17,759.8
6.9%
73,920.8
28.6%
1,200.0
75,120.8
29.0%
19,756.8
26.3%
55,364.0
21.4%
168,446.6
60%
110,145.2
39.5%
10,152.6
3.6%
19,134.8
6.9%
80,857.8
29.0%
1,200.0
82,057.8
29.5%
21,581.2
26.3%
60,476.6
21.7%
108,902.0
62.6%
65,090.0
37.4%
4,795.0
2.8%
11,043.0
6.3%
49,252.0
28.3%
940.0
50,192.0
28.8%
13,161.0
26.2%
37,031.0
21.3%
121,368.0
60.7%
78,432.0
39.3%
6,606.0
3.3%
12,540.0
6.3%
59,286.0
29.7%
904.0
60,190.0
30.1%
15,728.0
26.1%
44,462.0
22.3%
146,781.4
60.6%
95,562.0
39.4%
8,957.3
3.7%
16,467.6
6.8%
70,137.2
28.9%
1,236.0
71,373.2
29.5%
18,883.8
26.5%
52,489.4
21.7%
159,916.7
60.7%
103,608.4
39.3%
9,694.7
3.7%
18,045.4
6.8%
75,868.4
28.8%
1,200.0
77,068.4
29.2%
20,269.0
26.3%
56,799.4
21.6%
Pro-Forma EPS
Y/Y % Change in Pro-Forma EPS
$5.68
-9.9%
$6.45
13.6%
$8.94
38.5%
$9.78
9.4%
$10.98
12.3%
$5.75
-8.7%
$7.39
28.6%
$9.09
22.9%
$10.10
11.2%
EPS (ex-Stock-Based Compensation Expense)
Y/Y % Change in EPS (ex-Stock-Based Comp.)
$5.93
-8.7%
$6.80
14.6%
$9.40
38.3%
$10.27
9.2%
$11.50
11.9%
$6.02
-7.5%
$7.77
29.0%
$9.56
23.1%
$10.60
10.9%
GAAP EPS
Shares Outstanding - Diluted
$5.68
6,521.6
$6.45
6,122.7
$8.94
5,817.7
$9.78
5,661.6
$10.98
5,507.6
$5.75
6,441.5
$7.39
6,015.6
$9.09
5,777.1
$10.10
5,623.1
Annual (FY) Key Ratios
Return-on-Equity
Return-on-Assets
Return-on-Invested Capital
Total Equity ($ millions)
Total Assets ($ millions)
Total Invested Capital ($ millions)
Long-Term Debt ($ millions)
Short-Term Debt ($ millions)
Total Debt ($ millions)
Total Capital ($ millions)
Debt-to-Capital Ratio
Debt-to-Equity Ratio
Capital Expenditures ($ millions)
% of Revenue
Depreciation ($ millions)
% of Revenue
D & A ($ millions)
Operating Cash Flow ($ millions)
Operating Cash Flow per share
Free Cash Flow ($ millions)
Free Cash Flow per share
Number of Apple Employees
Sales-Per-Employee Ratio
FY2013
30.6%
19.3%
28.0%
123,549
207,000
140,509
16,960.0
0.0
16,960.0
140,509
12.1%
13.7%
8,165
4.8%
6,757
2.6%
6,757
53,666
$8.23
45,501
$6.98
80,300
2.128
FY2014
33.6%
18.0%
27.0%
111,547
231,839
146,842
28,987.0
6,308.0
35,295.0
146,842
24.0%
31.6%
9,571
5.2%
7,946
3.3%
7,946
59,713
$9.75
50,142
$8.19
88,330
2.069
FY2015E
41.7%
20.2%
31.2%
137,786
282,071
181,657
40,072.0
3,799.0
43,871.0
181,657
24.2%
31.8%
11,586
4.9%
10,254
3.4%
10,254
80,409
$13.82
68,823
$11.83
97,163
2.427
FY2016E
36.8%
18.5%
28.0%
163,497
315,740
207,368
40,072.0
3,799.0
43,871.0
207,368
21.2%
26.8%
12,400
4.8%
10,400
3.7%
10,400
73,764
$13.03
61,364
$10.84
106,879
2.422
FY2017E
33.9%
18.0%
26.8%
193,395
355,733
237,266
40,072.0
3,799.0
43,871.0
237,266
18.5%
22.7%
12,800
4.6%
10,400
3.6%
10,400
79,479
$14.43
66,679
$12.11
117,567
2.370
CY2013
28.8%
17.6%
26.5%
129,684
225,184
146,645
16,961
0
16,961
146,645
11.6%
13.1%
7,833
4.5%
7,313
2.8%
7,313
NA
NA
NA
NA
NA
NA
CY2014
35.1%
18.3%
28.6%
123,328
261,894
159,731
32,504
3,899
36,403
159,731
22.8%
29.5%
10,803
5.4%
8,377
3.3%
8,377
NA
NA
NA
NA
NA
NA
CY2015E
38.5%
17.9%
29.3%
149,019
325,026
192,890
40,072
3,799
43,871
192,890
22.7%
29.4%
11,469
4.7%
10,279
3.7%
10,279
NA
NA
NA
NA
NA
NA
CY2016E
35.0%
16.7%
27.1%
175,910
357,050
219,781
40,072
3,799
43,871
219,781
20.0%
24.9%
12,500
4.7%
10,400
0.0%
10,400
NA
NA
NA
NA
NA
NA
Tangible Book-Value Per Share
Book-Value Per Share
Cash Per Share
Net Cash Per Share
$18.51
$19.41
$23.06
$20.40
$17.21
$18.68
$25.99
$20.08
$22.41
$23.93
$35.54
$27.92
$27.61
$29.18
$41.55
$33.72
$33.88
$35.49
$48.68
$40.63
$19.58
$20.55
$25.17
$22.48
$19.44
$20.97
$30.26
$24.07
$24.52
$26.06
$41.51
$33.84
$30.03
$31.61
$47.44
$39.55
Gross Margin %
Operating Margin %
Net Margin %
EBITDA Margin %
37.6%
28.7%
21.7%
32.6%
38.6%
28.7%
21.6%
33.1%
39.3%
29.5%
22.0%
33.8%
39.1%
28.6%
21.4%
32.6%
39.5%
29.0%
21.7%
32.8%
37.4%
28.3%
21.3%
32.5%
39.3%
29.7%
22.3%
33.9%
39.4%
28.9%
21.7%
33.2%
39.3%
28.8%
21.6%
32.7%
1,764
13,102
22,367
25.7
4.4
74.5
-44.5
83.4
0.9
55,756.0
36,183.4
2,111
17,460
30,196
30.5
6.3
85.5
-48.6
57.9
0.8
60,449.0
38,786.0
2,221
21,934
35,441
30.5
5.5
83.7
-47.7
66.0
0.9
79,814.0
51,183.8
2,382
23,533
38,602
32.1
5.3
85.8
-48.4
68.5
0.9
84,320.8
54,479.6
2,283
16,709
38,001
28.2
6.6
101.6
-66.8
55.1
0.8
67,663.0
43,794.2
2,539
19,306
39,687
27.1
6.0
96.6
-63.5
60.9
0.8
80,416.2
51,580.4
2,686
20,420
39,403
27.5
6.0
90.3
-56.8
61.2
0.8
86,268.4
55,915.0
Inventory ($ millions)
Accounts Receivable ($ millions)
Accounts Payable ($ millions)
Accounts Receivable DSO
Days in Inventory
Accounts Payable DO
Cash Cycle Days
Inventory Turns Ratio
Asset Turnover Ratio
EBITDA ($ millions)
NOPAT ($ millions)
Source: Cantor Fitzgerald estimates, Company Data
2,620
2,122
25,882
14,200
41,820
29,588
32.4
27.1
5.4
6.0
87.1
93.8
-49.3
-60.8
67.3
60.9
0.8
0.8
91,257.8 56,565.0
59,592.2 36,337.5
6
June 9, 2015
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
BALANCE SHEET (SEPT)
FY2015E
FY2016E
FY2017E
Assets:
Current Assets:
Cash & Cash Equivalents
Short-term Marketable Securities
Accounts Receivable
Inventories
Deferred Tax Assets
Other Current Assets
Total Current Assets
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E
19,478
12,985
16,709
2,283
5,046
26,902
83,403
14,489
18,607
10,905
2,396
5,141
16,353
67,891
17,590
18,607
14,241
2,537
4,382
13,940
71,298
25,575
18,607
21,934
2,221
4,764
15,155
88,256
58,345
18,607
19,306
2,539
7,189
22,868
128,854
46,150
18,607
11,813
2,596
5,569
17,715
102,451
47,919
18,607
16,472
2,934
5,069
16,124
107,125
53,764
18,607
23,533
2,382
5,112
16,261
119,659
84,955
18,607
20,420
2,686
7,604
24,188
158,460
76,878
18,607
12,835
2,820
6,051
19,248
136,439
79,383
18,607
16,366
3,133
5,412
17,216
140,118
86,247
18,607
25,882
2,620
5,622
17,883
156,862
Long-term Marketable Securities
Property, Plant & Equipment
Goodwill
Acquired Intangible Assets, Net
Other Assets
Total Assets
145,492
20,392
4,629
4,370
3,608
261,894
160,443
20,151
4,711
4,061
3,937
261,194
160,443
20,551
4,711
4,061
3,356
264,420
160,443
20,951
4,711
4,061
3,649
282,071
160,443
21,451
4,711
4,061
5,506
325,026
160,443
21,951
4,711
4,061
4,265
297,882
160,443
22,451
4,711
4,061
3,882
302,673
160,443
22,951
4,711
4,061
3,915
315,740
160,443
23,551
4,711
4,061
5,823
357,050
160,443
24,151
4,711
4,061
4,634
334,439
160,443
24,751
4,711
4,061
4,145
338,228
160,443
25,351
4,711
4,061
4,305
355,733
Liabilities & Shareholders' Equity:
Current Liabilities:
Short-term Debt
Accounts Payable
Accrued Expenses
Dividend Payable
Deferred Revenue
Total Current Liabilities
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E
3,899
38,001
22,724
0
8,987
73,611
3,799
23,159
22,827
0
8,944
58,729
3,799
24,687
19,459
2,994
9,108
60,046
3,799
35,441
21,155
2,974
8,827
72,196
3,799
39,687
31,921
2,954
10,885
89,246
3,799
21,946
24,729
3,273
10,946
64,692
3,799
28,554
22,507
3,250
10,535
68,645
3,799
38,602
22,698
3,250
9,470
77,820
3,799
39,403
33,764
3,206
11,513
91,685
3,799
23,844
26,868
3,513
11,893
69,916
3,799
30,488
24,031
3,488
11,248
73,055
3,799
41,820
24,963
3,488
10,415
84,486
Deferred Revenue - Non-current
Long-term Debt
Other Non-current Liabilities
Total Liabilities
3,480
32,504
28,971
138,566
3,571
40,072
29,816
132,188
4,033
40,072
25,417
129,568
4,385
40,072
27,632
144,285
4,994
40,072
41,695
176,006
5,125
40,072
32,300
142,190
4,665
40,072
29,398
142,780
4,704
40,072
29,647
152,243
5,282
40,072
44,101
181,140
5,569
40,072
35,094
150,651
4,981
40,072
31,389
149,497
5,174
40,072
32,606
162,338
Shareholders' Equity:
Common Stock
Deferred Stock Compensation
Retained Earnings
Accumulated Other Comprehensive Income
Total Shareholders' Equity
24,187
0
97,178
1,963
123,328
25,376
0
100,920
2,710
129,006
26,308
0
105,834
2,710
134,852
27,245
0
107,831
2,710
137,786
28,187
0
118,122
2,710
149,019
29,134
0
123,849
2,710
155,693
30,086
0
127,097
2,710
159,893
31,043
0
129,744
2,710
163,497
32,005
0
141,195
2,710
175,910
32,972
0
148,107
2,710
183,789
33,944
0
152,078
2,710
188,732
34,921
0
155,764
2,710
193,395
261,894
261,194
264,420
282,071
325,026
297,882
302,673
315,740
357,050
334,439
338,228
355,733
Liabilities & Shareholders' Equity
Source: Cantor Fitzgerald estimates, Company
7
June 9, 2015
APPLE, INC. ($ millions)
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
PRODUCT SEGMENTS (SEPT)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
PRODUCT SEGMENTS (SEPT)
Revenue by Product ($ millions):
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E Revenue by Product ($ millions):
FY2012
FY2013
FY2014
FY2015E FY2016E FY2017E
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
6,944
4,799
51,182
8,985
2,689
5,615
4,996
40,282
5,428
1,689
6,007
4,896
30,493
4,872
3,183
6,604
4,994
33,218
4,456
4,489
6,871
5,194
52,648
8,966
7,443
5,780
5,401
39,443
6,603
5,616
6,012
5,510
34,999
5,554
5,122
6,669
5,620
34,911
5,077
5,406
6,938
5,844
54,942
9,717
8,363
5,837
6,078
42,443
7,317
6,603
6,071
6,200
36,530
6,286
5,984
6,735
6,324
38,037
5,826
6,517
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
23,221
12,890
78,692
30,945
10,760
21,483
16,051
91,279
31,980
10,117
24,079
18,063
101,991
30,283
8,379
25,170
19,685
155,175
23,741
12,050
25,332
21,724
162,001
26,199
23,587
25,582
24,446
171,951
29,146
27,467
Total Revenue
74,599
58,010.0
49,450.3
53,761.6
81,121.4
62,842.7
57,196.7
57,682.0
85,804
68,278
61,071
63,439
Total Revenue
156,508
170,910
182,795
235,821
258,843
278,592
FY2012
FY2013
FY2014
FY2015E FY2016E FY2017E
14.8%
8.2%
50.3%
19.8%
6.9%
12.6%
9.4%
53.4%
18.7%
5.9%
13.2%
9.9%
55.8%
16.6%
4.6%
Percentage of Revenue by Product:
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
Total Revenue
Q/Q % Change in Revenue by Product:
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E Percentage of Revenue by Product:
9.3%
6.4%
68.6%
12.0%
3.6%
9.7%
8.6%
69.4%
9.4%
2.9%
12.1%
9.9%
61.7%
9.9%
6.4%
12.3%
9.3%
61.8%
8.3%
8.4%
8.5%
6.4%
64.9%
11.1%
9.2%
9.2%
8.6%
62.8%
10.5%
8.9%
10.5%
9.6%
61.2%
9.7%
9.0%
11.6%
9.7%
60.5%
8.8%
9.4%
8.1%
6.8%
64.0%
11.3%
9.7%
8.5%
8.9%
62.2%
10.7%
9.7%
9.9%
10.2%
59.8%
10.3%
9.8%
10.6%
10.0%
60.0%
9.2%
10.3%
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0% Total Revenue
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E Y/Y % Change in Revenue by Product:
100.0%
100.0%
100.0%
FY2012
FY2013
FY2014
10.7%
8.3%
65.8%
10.1%
5.1%
9.8%
8.4%
62.6%
10.1%
9.1%
9.2%
8.8%
61.7%
10.5%
9.9%
100.0%
100.0%
100.0%
FY2015E FY2016E FY2017E
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
4.8%
4.1%
116.2%
69.0%
41.8%
-19.1%
4.1%
-21.3%
-39.6%
-37.2%
7.0%
-2.0%
-24.3%
-10.3%
88.5%
9.9%
2.0%
8.9%
-8.5%
41.0%
4.0%
4.0%
58.5%
101.2%
65.8%
-15.9%
4.0%
-25.1%
-26.4%
-24.5%
4.0%
2.0%
-11.3%
-15.9%
-8.8%
10.9%
2.0%
-0.3%
-8.6%
5.5%
4.0%
4.0%
57.4%
91.4%
54.7%
-15.9%
4.0%
-22.8%
-24.7%
-21.0%
4.0%
2.0%
-13.9%
-14.1%
-9.4%
10.9%
2.0%
4.1%
-7.3%
8.9%
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
-7.5%
24.5%
16.0%
3.3%
-6.0%
12.1%
12.5%
11.7%
-5.3%
-17.2%
4.5%
9.0%
52.1%
-21.6%
43.8%
0.6%
10.4%
4.4%
10.4%
95.7%
1.0%
12.5%
6.1%
11.2%
16.4%
Total Revenue
77.1%
-22.2%
-14.8%
8.7%
50.9%
-22.5%
-9.0%
0.8%
48.8%
-20.4%
-10.6%
3.9%
Total Revenue
9.2%
7.0%
29.0%
9.8%
7.6%
Y/Y % Change in Revenue by Product:
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E
Mac
Services (iTunes/Software/Services/Apple Pay)
iPhone
iPad
Other Products
8.6%
9.1%
57.5%
-21.7%
-5.2%
1.7%
9.2%
54.6%
-28.7%
-10.2%
8.4%
9.2%
54.4%
-17.3%
80.1%
-0.3%
8.4%
40.3%
-16.2%
136.8%
-1.1%
8.2%
2.9%
-0.2%
176.8%
2.9%
8.1%
-2.1%
21.6%
232.5%
0.1%
12.5%
14.8%
14.0%
60.9%
1.0%
12.5%
5.1%
13.9%
20.4%
1.0%
12.5%
4.4%
8.4%
12.4%
1.0%
12.5%
7.6%
10.8%
17.6%
1.0%
12.5%
4.4%
13.2%
16.8%
1.0%
12.5%
9.0%
14.8%
20.6%
Total Revenue
Source: Cantor Fitzgerald estimates, Company data
29.5%
27.1%
32.1%
27.6%
8.7%
8.3%
15.7%
7.3%
5.8%
8.6%
6.8%
10.0%
Source: Cantor Fitzgerald estimates, Company data
8
June 9, 2015
APPLE, INC. ($ millions)
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
PRODUCT SEGMENTS (SEPT)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
PRODUCT SEGMENTS (SEPT)
Units Sales by Product (thousands):
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E Units Sales by Product (thousands):
Total Mac
iPhone
iPad
Q/Q Unit Sales Growth:
Total Mac
iPhone
iPad
Y/Y Unit Sales Growth:
Total Mac
iPhone
iPad
Source: Cantor Fitzgerald estimates, Company data
5,519
74,468
21,419
4,563
61,170
12,623
4,928
46,250
10,900
5,470
51,250
10,000
5,580
76,750
18,500
4,743
58,250
15,000
4,980
51,750
12,500
5,577
53,250
11,500
5,689
79,750
20,500
4,836
62,250
16,500
5,077
53,750
14,000
5,687
57,750
13,000
Total Mac
iPhone
iPad
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E Y/Y Unit Sales Growth:
0.0%
89.6%
73.9%
-17.3%
-17.9%
-41.1%
8.0%
-24.4%
-13.6%
11.0%
10.8%
-8.3%
2.0%
49.8%
85.0%
-15.0%
-24.1%
-18.9%
5.0%
-11.2%
-16.7%
12.0%
2.9%
-8.0%
2.0%
49.8%
78.3%
-15.0%
-21.9%
-19.5%
5.0%
-13.7%
-15.2%
12.0%
7.4%
-7.1%
Total Mac
iPhone
iPad
FY2012
FY2013
FY2014
FY2015E FY2016E FY2017E
18,158
125,046
58,310
16,341
150,257
71,033
18,906
169,219
67,977
20,480
233,138
54,942
FY2012
FY2013
FY2014
FY2015E FY2016E FY2017E
-10.0%
20.2%
21.8%
15.7%
12.6%
-4.3%
8.3%
37.8%
-19.2%
20,879
240,000
57,500
1.9%
2.9%
4.7%
21,288
253,500
64,000
2.0%
5.6%
11.3%
1QFY15A 2QFY15A 3QFY15E 4QFY15E 1QFY16E 2QFY16E 3QFY16E 4QFY16E 1QFY17E 2QFY17E 3QFY17E 4QFY17E
14.1%
45.9%
-17.7%
10.3%
39.9%
-22.8%
11.7%
31.4%
-17.9%
-0.9%
30.5%
-18.8%
1.1%
3.1%
-13.6%
3.9%
-4.8%
18.8%
1.0%
11.9%
14.7%
2.0%
3.9%
15.0%
2.0%
3.9%
10.8%
2.0%
6.9%
10.0%
2.0%
3.9%
12.0%
2.0%
8.5%
13.0%
Source: Cantor Fitzgerald estimates, Company data
9
June 9, 2015
APPLE, INC. ($ millions)
BRIAN J. WHITE, CFA 212-610-2416
CANTOR FITZGERALD
CASH FLOW STATEMENT
Cash Flow from Operating Activities:
Net Income (Net Loss)
Cumulative Effects of Accounting Changes, Net of Taxes
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities
FY2012
FY2013
FY2014
FY2015E
FY2016E
FY2017E
41,733.0
0.0
37,037.0
0.0
39,510.0
0.0
51,997.6
0.0
55,364.0
0.0
60,476.6
0.0
Depreciation, Amortization & Accretion
Stock-based Compensation Expense
Non-cash Restructuring
Deferred Income Taxes Expense/(Benefit)
Tax Benefits from Stock Options
Loss on Disposition of Property, Plant & Equipment
Gains on Sales of Investments, Net
In-process Research & Development
Changes in operating assets and liabilities:
Accounts Receivable
Inventories
Other Current Assets
Other Assets
Accounts Payable
Deferred Revenue
Other Liabilities
3,277.0
1,740.0
0.0
4,405.0
0.0
0.0
0.0
0.0
6,757.0
2,253.0
0.0
1,141.0
0.0
0.0
0.0
0.0
7,946.0
2,863.0
0.0
2,347.0
0.0
0.0
0.0
0.0
10,254.0
3,684.0
0.0
2,255.5
0.0
0.0
0.0
0.0
10,400.0
3,798.0
0.0
-347.4
0.0
0.0
0.0
0.0
10,400.0
3,878.0
0.0
-510.2
0.0
0.0
0.0
0.0
-5,551.0
-15.0
-1,414.0
-3,162.0
4,467.0
2,824.0
2,552.0
-2,172.0
-973.0
223.0
1,080.0
2,340.0
1,459.0
4,521.0
-4,232.0
-76.0
-2,220.0
167.0
5,938.0
1,460.0
6,010.0
-4,473.9
-109.5
6,145.6
288.3
6,854.0
1,689.3
1,823.7
-1,599.4
-161.9
-1,105.1
-266.1
3,161.2
963.4
3,557.7
-2,348.7
-237.8
-1,622.9
-390.7
3,218.3
1,414.7
5,202.0
NET CASH GENERATED BY OPERATING ACTIVITIES:
50,856.0
53,666.0
59,713.0
80,408.5
73,764.2
79,479.2
Cash Flow from Investing Activities:
Purchases of Marketable Securities
Proceeds from Maturities of Marketable Securities
Procceeds from Sales of Marketable Securities
Purchases of Other Long-term Investments
Payment Made in Connection with Business Acquisitions, Net of Cash Acquired
Payment for Acquistion of Properaty, Plant & Equipment
Payment for Acquistion of Intangible Assets
Other
-151,232.0
13,035.0
99,770.0
0.0
-350.0
-8,295.0
-1,107.0
-48.0
-148,489.0
20,317.0
104,130.0
0.0
-496.0
-8,165.0
-911.0
-160.0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
-48,227.0 -33,774.0 -22,579.0 -43,545.0 -12,400.0 -12,800.0
Cash Flow from Financing Activities:
Decrease in Notes Payable to Banks
Payment of Long-term Debt
Cash Dividends Paid
Proceeds from Issuance of Common Stock/Stock Repurchase
Excess Tax Benefits from Stock-based Compenstation
Cash Used to Net Share Settle Equity Awards/Stock Repurchase/Other
0.0
0.0
-2,488.0
665.0
1,351.0
-1,226.0
0.0
6,306.0
11,332.0
0.0
0.0
0.0
0.0
-2,508.0
0.0
0.0
-10,564.0 -11,126.0 -11,515.0 -12,450.9 -13,433.9
530.0
730.0
-22,191.0 -20,723.8 -20,762.3
701.0
739.0
357.0
0.0
0.0
-7,046.0 -34,198.0
-608.0
0.0
0.0
NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES:
-1,698.0
-16,379.0 -37,549.0 -25,133.0 -33,174.7 -34,196.3
Net Increase (Decrease) in Cash & Cash Equivalents
Cash & Cash Equivalents, Beginning of Year
Cash & Cash Equivalents, End of Fiscal Year
Source: Cantor Fitzgerald estimates, Company data
-217,128.0 -92,523.0
0.0
0.0
18,810.0
5,871.0
0.0
0.0
189,301.0 48,924.0
0.0
0.0
0.0
0.0
0.0
0.0
-3,765.0
-115.0
0.0
0.0
-9,571.0 -11,586.0 -12,400.0 -12,800.0
-242.0
-155.0
0.0
0.0
16.0
6,039.0
0.0
0.0
931.0
3,513.0
-415.0
11,730.5
28,189.5
32,483.0
9,815.0
10,746.0
14,259.0
13,844.0
25,574.5
53,764.0
10,746.0
14,259.0
13,844.0
25,574.5
53,764.0
86,247.0
10
June 9, 2015
Company Description
Headquartered in Cupertino, Apple was established in 1976 (incorporated in 1977) as a personal computer company by Steve Jobs and
Steve Wozniak. Apple’s first product, the Apple I, was launched in April 1976. Today, Apple is a leading player across the mobile device
market with products such as the iPhone, iPad, iPod and Mac portfolio, combined with a digital ecosystem that includes iTunes, the
App Store, iCloud and iBooks.
Companies Mentioned:
Apple Inc. (AAPL - NASDAQ): BUY
Disclosures Appendix
Analyst Certification
The analyst primarily responsible for this research report, and whose name appears on the front cover, certifies that: (i) all of the views expressed in
this research report accurately reflects his or her personal views about any and all of the subject securities or issuers featured in this report; and (ii) no
part of any of the research analyst’s compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed
by the research analyst in this report.
Legal Disclosures
Investment banking (next 3 months): Cantor Fitzgerald and/or its affiliates, expect to receive, or intend to seek, compensation for investment banking
services within the next three months from all of the companies referenced within this report.
Lead or Co-manager: Cantor Fitzgerald and/or its affiliates, has not acted as lead or co-manager in a public offering of equity and/or debt securities
for Apple Inc. within the last 12 months
Cantor Fitzgerald and/or its affiliates has not received compensation for investment banking services in the last 12 months from Apple Inc..
Cantor Fitzgerald and/or its affiliates is a market maker in Apple Inc..
Cantor Fitzgerald's rating system
BUY: We have a positive outlook on the stock based on our expected 12 month return relative to its risk. The expected return is based on our view of
the company and industry fundamentals, catalysts, and valuation. We recommend investors add to their position.
HOLD: We have a neutral outlook on the stock based on our expected 12 month return relative to its risk. The expected return is based on our view
of the company and industry fundamentals, catalysts, and valuation.
SELL: We have a negative outlook on the stock based on our expected 12 month return relative to its risk. The expected return is based on our view
of the company and industry fundamentals, catalysts, and valuation. We recommend investors reduce their position.
NC: Not Covered. Cantor Fitzgerald does not provide an investment opinion or does not provide research coverage on this stock.
Prior to September 12, 2006, Cantor Fitzgerald had the below ratings:
BUY - denotes stocks that we expect will provide a total return (price appreciation plus yield) of 15% or more over a 12-month period. a BUY rated
stock is expected to outperform the total average return of analyst's industry coverage universe on a risk adjusted basis.
HOLD - denotes stocks that we suggest will provide a total return or total negative return of up to 15% over 12-month period. A HOLD rated stock is
expected to perform in-line with the total average return of the analyst's industry coverage universe on a risk adjusted basis.
SELL - denotes stocks that we expect to provide a total negative return of more than 15% over a 12 month period. A SELL rated stock is expected to
underperform the total average return of the analyst's industry coverage universe on a risk adjusted basis.
NC - Not Covered. Cantor Fitzgerald does not provide research coverage on this company.
Other Disclosures
This report is for informational purposes only and is based on publicly available data believed to be reliable, but no representation is made that such data
are accurate or complete. Opinions and projections contained herein reflect our opinion as of the date of this report and are subject to change. Pursuant
to Cantor Fitzgerald's policy, the author of this report does not own shares in any company he/she covers.
Disclosures for UK investors
This material is approved for distribution in the United Kingdom by Cantor Fitzgerald Europe (“CFE”). CFE is authorised and regulated by the Financial
Conduct Authority (“FCA”). While we believe this information and the materials upon which this information was based is accurate, except for any
obligations under the rules of the FCA, we do not guarantee its accuracy. This material is only intended for use by eligible counterparties or professional
clients who fall within articles 19 or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 and not the general investing
public. None of the investments or investment services mentioned or described herein are available to other persons in the U.K and in particular are
not available to "retail clients” as defined by the rules of the FCA.
11
June 9, 2015
Disclosure for Canadian Institutional Investors
This research report was prepared by analysts of Cantor Fitzgerald & Co. and not by Cantor Fitzgerald Canada Corporation. As a result, this report has
not been prepared subject to Canadian Disclosure requirements. Cantor Fitzgerald Canada may distribute research reports prepared by its affiliates.
Risks
The financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions based
on their specific investment objectives. Past performance should not be taken as an indication or guarantee of future performance. The price, value of
and income from, any of the financial instruments featured in this report can rise as well as fall and be affected by changes in economic, financial and
political factors. If a financial instrument is denominated in a currency other than the investor's currency, a change in exchange rates may adversely
affect the price or value of, or income derived from, the financial instrument, and such investors effectively assume currency risk. In addition, investors
in securities such as ADRs, whose value is affected by the currency of the home market of the underlying security, effectively assume currency risk.
Distribution of Ratings/Investment Banking Services (IB) as of 06/09/15
Cantor
IB Serv./Past 12 Mos.
Rating
BUY [B]
HOLD [H]
SELL [S]
Count
Percent
Count
Percent
96
54
7
61.15
34.39
4.46
26
8
1
27.08
14.81
14.29
(1)
Additional information available on request. Copyright (C) Cantor Fitzgerald 2015
12