Equity Research Mini-Portfolio

Apple Inc. (AAPL)

BUY

$195.00

$175.50

Current Price

11.1%

Upside

28.5x

P/E Ratio

2.8%

Dividend Yield

Investment Thesis

Strong Buy: Apple's ecosystem moat, Services revenue growth, and iPhone 15 cycle provide multiple catalysts. DCF analysis suggests 11% upside with conservative assumptions. Trading comps support premium valuation given superior margins and cash generation.

DCF Analysis

Year	Revenue ($B)	EBITDA ($B)	FCF ($B)	Terminal Value ($B)
2024E	394.3	130.2	99.8	-
2025E	412.1	138.5	108.2	-
2026E	428.9	145.8	115.6	-
2027E	444.2	151.2	122.1	-
2028E	458.1	156.8	128.3	3,247.5

DCF Assumptions: WACC 8.5%, Terminal Growth 2.5%, Exit Multiple 15.0x EBITDA

Sensitivity Analysis

WACC / Growth

2.0%

2.5%

3.0%

3.5%

8.0%

$201.50

$208.20

$215.80

$224.30

8.5%

$188.40

$195.00

$202.50

$211.20

9.0%

$176.80

$183.20

$190.50

$198.90

Key Catalysts

iPhone 15 Pro Max strong demand and ASP expansion

Services revenue growth accelerating (20%+ YoY)

Apple Vision Pro launch driving AR/VR adoption

China market recovery and supply chain normalization

Key Risks

China regulatory headwinds and market share pressure

Supply chain disruptions and component cost inflation

Competition in Services from Google and Microsoft

Macroeconomic headwinds affecting consumer spending

Microsoft Corporation (MSFT)

BUY

$420.00

$378.50

Current Price

11.0%

Upside

32.1x

P/E Ratio

0.7%

Dividend Yield

Investment Thesis

Buy: Microsoft's Azure cloud dominance and AI integration across Office 365 create sustainable competitive advantages. DCF analysis indicates 11% upside with AI monetization as key growth driver. Premium valuation justified by recurring revenue model and market leadership.

DCF Analysis

Year	Revenue ($B)	EBITDA ($B)	FCF ($B)	Terminal Value ($B)
2024E	211.2	101.8	67.5	-
2025E	232.1	115.2	78.9	-
2026E	254.8	129.6	91.2	-
2027E	278.9	144.8	104.5	-
2028E	304.2	161.2	118.9	2,891.3

DCF Assumptions: WACC 9.0%, Terminal Growth 2.5%, Exit Multiple 18.0x EBITDA

Key Catalysts

Azure AI services driving cloud revenue acceleration

Copilot integration across Office 365 increasing ARPU

Enterprise AI adoption and Microsoft 365 E5 upgrades

Gaming segment recovery with Activision integration

Key Risks

Cloud market competition from AWS and Google Cloud

AI regulation and data privacy concerns

Enterprise IT spending slowdown in weak macro environment

Currency headwinds from strong USD

Tesla Inc. (TSLA)

HOLD

$245.00

$248.50

Current Price

-1.4%

Upside

58.2x

P/E Ratio

0.0%

Dividend Yield

Investment Thesis

Hold: Tesla faces near-term headwinds from price competition and production challenges, but long-term EV market leadership and energy business provide optionality. Current valuation appears fair given execution risks and margin pressure. Awaiting clearer signs of demand recovery.

DCF Analysis

Year	Revenue ($B)	EBITDA ($B)	FCF ($B)	Terminal Value ($B)
2024E	96.8	12.4	8.2	-
2025E	108.2	15.8	12.1	-
2026E	121.5	19.6	16.8	-
2027E	135.8	23.8	22.1	-
2028E	151.2	28.4	28.5	1,247.8

DCF Assumptions: WACC 12.0%, Terminal Growth 3.0%, Exit Multiple 20.0x EBITDA

Key Catalysts

Cybertruck production ramp and delivery acceleration

Full Self-Driving (FSD) regulatory approval and monetization

Energy storage and solar business margin expansion

International expansion in India and emerging markets

Key Risks

Intense EV competition from traditional automakers

Production bottlenecks and supply chain constraints

Regulatory challenges for autonomous driving

Elon Musk's leadership distractions and controversies