Apple and Fed Balance Sheet Price Target

Just thinking about where markets are headed.

Apple (AAPL) represents 7% of the S&P 500. Apple also represents just under 12.633% of the NASDAQ 100. Which brings me to this concerning question. On May 4, when Apple reports earnings, if they miss or show signs of year over year, net income declines, how far could Apple take the S&P 500 and the NASDAQ 100 down?

Apples stats are as follow:

• Apple market cap $2.7 Trillion

• Apple represents 7.19% S&P 500

• Apple represents 12.633% Nasdaq 100

• Number of shares 15.91 billion

• P/E: 28.26

If Apple’s market cap where to fall by 10% after they report an estimated earnings of 5.98 per share on May 4, 2023 what would the price be and what would the Price/Earnings be?

• Price would be $152.73, P/E would be 25.43

Lets say that they really bomb and the market cap goes down by 20%, after they report an estimated earnings of 5.98 per share on May 4, 2023 what would the price be and what would the Price/Earnings be?

• Price would be $135.76, P/E would be 22.70

Ok, that’s interesting. But lets say if the P/E where to go down to 18, the price would be $107.64 using the estimated earnings of 5.98 per share on May 4, 2023.

Something I’ve been thinking about is the Fed and their move to reduce their balance sheet. If they succeed in reducing the balance sheet from its $8.614,797 trillion to $4.241,507 trillion which was its balance on March 2, 2020 or a 50.76% reduction, what would the price of Apple be? March 2020 the price was at $91 or a market cap of $1.45 trillion. Using estimated EPS of $5.98, the P/E would be 15.21.

To me, a P/E of 15.21 seems reasonable for Apple. So is Apple a buy at $91?

Have a great weekend.