Neil Hughes
With shares of Apple stock continuing to gain value, RBC Capital Markets has been prompted to raise its price target on the iPhone maker for the second time in as many weeks.
Analyst Amit Daryanani issued a note to investors on Monday revealing its new price target of $645, up from a previous forecast of $625. Following Apple's surprisingly strong second quarter results last month, Daryanani had already increased his target from $590.
The analyst's latest revision, which comes alongside a maintained rating of "outperform," is intended to reflect Apple's increased share buyback program and its recently raised debt to fund that initiative.
Daryanani expects Apple to repurchase some $44 billion in shares through December of 2015, implying more than $6 billion in buybacks per quarter. The newly increased buyback suggests Apple will buy an additional 50 million shares at an average price point of $590.
In addition to the higher price target, the analyst has also increased his fiscal year 2015 earnings per share estimate by more than a dollar to $48.96.
Daryanani recommends that investors remain long on AAPL, citing multiple catalysts ahead for the company. In particular, he expects the upcoming Worldwide Developers Conference in June, an anticipated "iPhone 6" launch around September, and a new iPad refresh in the December quarter to help drive the stock price higher.
Shares of Apple stock are trading at their highest levels in over a year following the company's strong second quarter, in which it announced its expanded capital reinvestment program, as well as a forthcoming 7-for-1 stock split. AAPL shares briefly flirted with a price north of $599 last week, but eventually retreated after finding resistance at the $600 barrier.
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16 Comments
That's $92.14 post split.
And when the stock splits, the same guy will scream that Apple is doomed because it didn’t meet his target.
Things are looking up for Apple's share price and I'm definitely satisfied with the movement and increased dividends. I'm not hoping for some outrageous price target and if Apple can maintain $600 for the next few months I'll have no complaints at all about what moves Tim Cook has done to raise Apple's share price to this level. It certainly seemed for quite a long while, Apple's share price didn't move at all despite all those management moves. I have a good feeling about the stock split and hope the psychological effect kicks in to entice mom and pop investors. I've also noticed over the past couple of months, the institutional ownership (Google finance) jumped a couple of percentage points and that bodes well for shareholders.
Buybacks are nice but I'm still hoping for a major acquisition into mobile payments. That would really have investors salivating over a juicy Apple.
Flirting with $600 again today. Currently near $598
[quote name="Constable Odo" url="/t/179054/rbc-again-raises-price-target-on-apple-stock-to-645-on-strength-of-share-buybacks#post_2527552"]Things are looking up for Apple's share price and I'm definitely satisfied with the movement and increased dividends. I'm not hoping for some outrageous price target and if Apple can maintain $600 for the next few months I'll have no complaints at all about what moves Tim Cook has done to raise Apple's share price to this level. It certainly seemed for quite a long while, Apple's share price didn't move at all despite all those management moves. I have a good feeling about the stock split and hope the psychological effect kicks in to entice mom and pop investors. I've also noticed over the past couple of months, the institutional ownership (Google finance) jumped a couple of percentage points and that bodes well for shareholders. Buybacks are nice but I'm still hoping for a major acquisition into mobile payments. That would really have investors salivating over a juicy Apple. [/quote] And credit to DED and PED for constantly fighting back against the pro Scamsung/Google media.