Here I will discuss the opportunity in Apple Stock form investment point of view.
The first step is to find the Apple EPS growth rate for the previous five years which by gurufocus is 19.6%, that means the growth rate of apple EPS will increase yearly by 19.6%.
The second step is to find the EPS value of Apple stock after five years, which means that year 2027, by applying the number one economic formula which is :
FV=PV(1+i)n
- where FV the value we are looking for.
- PV = Apple last EPS for year 2022 which is 6.15$ and
- R = growth rate we find above 19.6 %
- n = 5 years
By applying the above formula, Apple EPS in year 2017 which means that 5 years from now will be 15.05$.
The Third step is to find the lowest P/E ratio for Apple for the past 5 years which is also can be found from gurufocus which is 18.85 in year 2019.
Now that we have Apple EPS in five years which is (15.05$), and we have the lowest P/E ratio in last five years as conservative investor, all we need to do is multiply the EPS to P/E and get Apple stock price in year 2027 as following:
Apple Stock price in year 2027 =(15.05)*(18.85)= 283.69 $.
So its fair to say that apple stock price will increase from 142.1 $ to 283.69$ in 2027.
As you can see Apple stock will increase from now at the end of year 2022 where its price is about 142.1$ to reach 283.69$ in 2027, which means it will increase in 99.64%, so if you invest 10,000 $ in apple stock today price your money will be almost doubled in 2027.
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