Apple Inc.

Apple's net cash-neutral target will be a multiple year process despite higher shareholder returns than FOCF generation. Its net cash position was $84 billion as of Dec. 26, 2020, with $196 billion cash and investments and gross debt of $112 billion. The company has publicly stated it intends to have a cash-neutral position over time and has been returning cash to shareholders in excess of free cash flow since fiscal 2018. Our base case assumes Apple will continue this practice. Still, we do not believe Apple will achieve its target before fiscal 2024. The stable outlook reflects our expectation that Apple will maintain a minimal financial risk profile while it shrinks its balance sheet through shareholder returns, debt repayments, and

...iPhone sales will be aided by new upgrade cycle. Apple Inc. launched its new 5G smartphones (iPhone 12 series) in late October 2020, later than its typical September release dates, partly contributing to expected sharper iPhone sales growth of 24% in fiscal 2021. Reception of the new iPhone launch is strong, as customers upgrade to 5G technology phones in anticipation of more applications with 5G connectivity use cases, as well as pent-up demand from customers who delayed phone upgrades. December 2020 quarter (fiscal first quarter) iPhone sales growth of 17% year over year came on the back of challenges such as the shutdown of some retail Apple stores, component supply constraints, and the iPhone 12 delay until late October. While the fiscal first quarter typically has the strongest sales because of the holiday season, we believe iPhone sales will remain strong throughout 2021 given installed base growth and improved trajectory in China....

Full Report