Chart of the Day – AAPL and iPhone impact on Retail Sales

by Enis October 15, 2012 2:39 pm • Commentary

Interesting post from Bespoke today, well worth a read.  The strongest category in today’s Retail Sales report was Electronics and Appliances, which has not been a very strong category over the past couple years because of the struggles of brick and mortar electronics retailers.  Here is Bespoke’s chart of the Electronics and Appliances retail category since January 2010:



As you can see, the iPhone 5 release gave this category a nice boost.  But what’s notable to me is that AAPL sales growth might finally be starting to lose momentum.  I wrote about the longer-term technical weakness evident on the AAPL chart in this CotD post last week.  You can also watch the video on CNBC with Maria Bartiromo in the Latest Videos section.  Today’s price action (AAPL flat, market up 0.7%) is just another small, incremental piece of evidence that the AAPL gravy train might have finally come to an end.

While valuation still looks ok, here is a good table showing the slowing growth for AAPL over the next couple years (and it’s based on analyst consensus, when analysts as a community are 85% buy rated on the name):



Focus specifically on the upper right hand table.  The EPS YoY % Growth rate in 2009, 2010, and 2011 was between 52 and 116%.  The expected growth rate over the next 3 years is 31%, 19%, and 16%, obviously much lower.  However, AAPL’s “cheap” P/E ratio of 15x is close to where it has been the past 2 years, so you are paying the same valuation for much less growth.  I don’t want to get involved down here with the stock down 10% from recent highs, but I think AAPL is a sale on any near-term bounces (maybe after earnings?).