Monday, April 28, 2014, 12:06 pm PT (03:06 pm ET)
Apple shares reach highest level in a year following strong earnings, stock split & larger buybackApple's stock has skyrocketed since last week's March quarter earnings report, in which the company excited investors with strong iPhone sales, a higher quarterly dividend, a larger share buyback program, and an upcoming 7-for-1 stock split [updated].
Apple's stock price over the last 5 days, via Yahoo.
Shares of AAPL were up nearly 3 percent as of afternoon trading on Monday, with a high during the day of over $590 per share. Shares are up more than $60 from its trading price just before Apple reported earnings last Wednesday.
Update: AAPL closed at $594.09 per share on Monday, its highest closing price in over a year.
After Apple's surprising March quarter, analysts on Wall Street responded positively, and many of them raised their price targets. Among investment firms tracked by AppleInsider, RBC Capital Markets, Cowen and Company, Evercore Partners and Canaccord Genuity all saw fit to raise their targets, while Cantor Fitzgerald held steady with its prediction of $777, the highest among major firms.
Apple's gains on Monday set a new 52-week high for the company. Shares of AAPL had tumbled from late-2012 through mid-2013 after reaching an all-time high north of $700 in September of 2012.
The company's stock surge has placed Apple out of a projected "valuation range" from Wells Fargo analyst Maynard Um. Um revised his numbers last week to predict that shares of Apple would trade between $515 and $585 for the foreseeable future, but Monday's gains pushed the company above that $585 upper tier.
The gains come after Apple beat expectations by earning $10.2 billion in quarterly net profit, driven by record sales of 43.7 million iPhones. The company also increased its share buyback plan to $90 billion through 2015, which it is expected to help finance with what could be come the second largest bond sale in corporate history.
The New York Stock Exchange, credit Carlos Delgado via Wikipedia.
Investors will also benefit from a new, larger quarterly dividend payout of $3.29 per share, and Apple executives have pledged to revisit and likely increase that dividend on an annual basis.
Finally, Wall Street watchers are excited about an upcoming 7-for-1 stock split, set to take place on June 2. Each shareholder of AAPL as of that date will be awarded six additional shares, which will be reflected when split-adjusted trading begins on June 9.
These capital allocation plans are made possible by Apple's massive $150 billion cash pile, which continues to grow as a result of the company's high margins and continuing record sales of its blockbuster iPhone lineup. Investors are hopeful that new products from the second half of 2014, including an anticipated refresh to the iPhone lineup potentially with larger displays, will further drive growth and profitability for the Cupertino, Calif., electronics maker.
On Topic: Investor
- UBS praises Apple CEO Tim Cook for thinking 'big,' pushing for iOS to become ubiquitous
- Apple, Inc. bought back another $5 billion of $AAPL stock in Q3 as shares rose 20%
- RBC ups Apple price target to $110 in anticipation of 'busy fall' for iPhone & 'iWatch'
- Wall Street on Apple's 'uneventful' June quarter: Excited by margins, concerned about guidance
- Notes of interest from Apple's Q3 2014 conference call