We think there are three broad trends driving Apple’s multiple expansion, namely the pending launch of the 5G iPhone, strong services growth, and a possibility that Apple is being viewed as a “safe-haven” stock through the current economic turmoil. Our dashboard Why Is Apple Stock Up 3x breaks down the key drivers of Apple’s growth.
Full Answer
Why should Apple buy back its own stock?
- Buybacks started in late 2012. ...
- Cash is still king. ...
- Debt can be good as long as it is not excessive. ...
- Net cash (Cash minus debt) The high-water mark for Apple’s net cash position was $162.7 billion in its December 2017 quarter. ...
Why now is a good time to buy Apple stock?
Why Apple Is a No-Brainer Stock to Buy Right Now
- Apple thrives despite challenges. The iPhone maker posted record revenue of $123.9 billion for the quarter that ended on Dec. ...
- Jumping into the metaverse. ...
- The services business is going from strength to strength. ...
- The stock is attractively valued. ...
Why does Apple repurchase so much stock?
- Estimated free cash flow per year: $70 billion
- Dividend payments per year: $14 billion
- Net increase in cash per year: $56 billion
Why do Apple buy back its own shares?
Apple's $460 Billion Stock Buyback
- Exhibit 1: Apple Share Buyback Pace (Annual - FY) The pickup in Apple’s buyback pace in FY2018 and FY2019 was due to U.S. ...
- Buyback Authorization. ...
- Buyback Criticism. ...
- Buybacks and the Pandemic. ...
Why is the Apple stock increasing?
Investors were pushing up Apple's (AAPL 1.62%) share price this morning as they processed a new report that showed inflation slowed between March and April. Some investors may also be reacting to positive financial results from companies in the tech sector. Apple's stock was up by 3.1% as of 11:36 a.m. ET.
Will Apple shares keep going up?
The site's AAPL stock forecast had shares reaching $249 by May 2024, $294 in May 2025 and $340 by May 2026. Meanwhile the five-year Apple stock price target to 2027 sees the stock at $385. This would represent an increase of 153% over the $152 level at the close on 9 May, 2022.
What is the future for Apple stock?
Stock Price Forecast The 39 analysts offering 12-month price forecasts for Apple Inc have a median target of 185.00, with a high estimate of 219.94 and a low estimate of 145.00. The median estimate represents a +30.70% increase from the last price of 141.55.
What will AAPL be worth in 5 years?
Based on our forecasts, a long-term increase is expected, the "AAPL" stock price prognosis for 2027-06-30 is 346.672 USD. With a 5-year investment, the revenue is expected to be around +144.81%. Your current $100 investment may be up to $244.81 in 2027.
The tech titan delivered a blockbuster quarter and announced a stock split
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What happened
Shares of Apple ( NASDAQ:AAPL) leapt 10.5% to a new closing high of $425.04 on Friday, following the company's expectation-crushing third-quarter results.
So what
Despite a host of coronavirus-related challenges, Apple's revenue jumped 11% year over year to $59.7 billion. The technology giant's profit growth was even more impressive. Its earnings per share climbed 18%, to $2.58. Wall Street had expected revenue and EPS of only $52.3 billion and $2.04.
Now what
Apple also announced a 4-for-1 stock split to "make the stock more accessible to a broader base of investors." Shareholders of record at the close of business on Aug. 24 will receive three additional shares for every Apple share they own. Apple's shares will begin trading on a split-adjusted basis on Aug. 31.
What happened
Tech investors are picking Apple (NASDAQ: AAPL) shares Wednesday morning, and as of 11:40 a.m. ET the stock is up a solid 2%.
So what
If you recall, it was only late last month that investor TFI Asset Management broke the story that Apple is working on a new augmented reality headset featuring "the same computing power level as the M1 for Mac" -- such that the AR headset could probably operate as a stand-alone device and not need to be linked to an iPhone to function.
Now what
Now admittedly, so far this is only a rumor. Also, the source of this rumor is the same as the source of the original report -- TFI Asset Management analyst Ming-Chi Kuo -- so you can't necessarily take today's news as confirmation of the November report; there's only a single source.
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What is the multiple of Apple in 2025?
Now, what about Apple’s multiple? We think it’s unlikely that Apple would command the 35x multiple it presently does in 2025 for a couple of reasons. Firstly, it’s quite likely that interest rates will increase by 2025, and this could translate into weaker valuations for the broader equity markets. The “safe-haven” premium for Apple may also diminish as the economy gets better. Apple’s Services business - which is coming under some anti-trust scrutiny could also see growth cool. Considering this, we believe a multiple of about 28x is likely to be fair for 2025. (For perspective, Apple’s average P/E ratio over the last 10 years was roughly 16x)
How much will Apple's net profit be in 2025?
Valuing Apple’s projected $86 billion in Net Profits at about 28x would imply a market cap of about $2.4 trillion by 2025. While this does translate into a $400 billion increase from Apple’s current market cap of close to $2 trillion, the incremental gains in market value will be much more limited, at about 20% over the next 5 years - or only about 4% per year. Sure, Apple’s buybacks and dividends will augment these returns for investors, but it’s probably reasonable to expect diminishing returns from Apple in the coming years.
Is Forbes opinion their own?
Opinions expressed by Forbes Contributors are their own.
NASDAQ: AAPL
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Supply chain challenges and weak demand could derail the iPhone maker
Shares of Apple ( AAPL -0.94% ) have recovered nicely in 2021 after a shaky start to the year, gaining more than 23%. What's impressive is that Apple has staged a comeback despite supply chain challenges that hurt its sales in the fourth quarter of fiscal 2021 (which ended on Sept. 25).
NASDAQ: AAPL
As the chart above shows, Apple stock has gained momentum since the beginning of October. That's not surprising as the launch of the iPhone 13 gave investors a reason to cheer, with the device witnessing robust demand that outpaced supply.
Why Apple stock might fall next year
The iPhone is Apple's most important product. It produced nearly $192 billion in revenue for the company in fiscal 2021, which was just over 52% of its total revenue of $365.8 billion. Now, there are rumors that Apple may be losing customers due to its inability to make enough iPhones to satisfy demand.
The stock could fly higher in the long run
Savvy investors, however, shouldn't worry about the potential short-term challenges Apple faces. Even if iPhone sales aren't as great as expected in the early part of 2022 due to problems out of the tech titan's control, one shouldn't forget the massive upgrade cycle that's driving Apple's growth.
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What is MarketBeat community ratings?
MarketBeat's community ratings are surveys of what our community members think about Apple and other stocks. Vote “Outperform” if you believe AAPL will outperform the S&P 500 over the long term. Vote “Underperform” if you believe AAPL will underperform the S&P 500 over the long term. You may vote once every thirty days.
What is the stock price of Apple in 2020?
Apple's stock was trading at $68.8575 on March 11th, 2020 when COVID-19 (Coronavirus) reached pandemic status according to the World Health Organization (WHO). Since then, AAPL stock has increased by 115.7% and is now trading at $148.56. View which stocks have been most impacted by COVID-19.
What is the ticker symbol for Apple?
Apple trades on the NASDAQ under the ticker symbol "AAPL."
What is the peg ratio of Apple?
Apple has a PEG Ratio of 2.05. PEG Ratios above 1 indicate that a company could be overvalued.
Where is Apple located?
Apple is headquartered at ONE APPLE PARK WAY, CUPERTINO CA, 95014.
When did Apple split?
Shares of Apple split on Monday, August 31st 2020. The 4-1 split was announced on Thursday, July 30th 2020. The newly minted shares were distributed to shareholders after the market closes on Friday, August 28th 2020. An investor that had 100 shares of Apple stock prior to the split would have 400 shares after the split.
Is Apple benefiting from the services segment?
According to Zacks Investment Research, "Apple is benefiting from continued momentum in the Services segment, driven by a robust performance of App Store, Apple Music, video and cloud services. Moreover, demand remains healthy for other Apple devices including iPad, Mac and Wearables.
What happened to AAPL stock in February 2020?
Back in February to March 2020, the AAPL stock plunged from $81.73 to $56.56 in less than a month during a broader market fall caused by the Covid-19 pandemic.
How many countries are there for the iPhone 13?
Abhinav Davuluri, a sector strategist at Morningstar, is optimistic about the launch of the iPhone 13 in 60 countries and regions with 5G support.
How much did Apple sell in 2021?
The most recently released Apple quarterly results, which cover the third quarter ending 25 September 2021, reveal Apple reported sales had risen 28.8% to $83.4b to create a new fourth-quarter record – though it missed Wall Street expectations, according to Wedbush analyst Daniel Ives.
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What is the target price of Apple in 2022?
Sharing the Apple share price forecast, Chatterjee also stated the fund group was establishing a December 2022 price target of $180.
How long has the US technology industry been innovating?
The US technology giant has been innovating for more than 40 years and launches of new and updated products are eagerly awaited by its loyal customer base.
What is the most important region for sales?
The Americas remained the most important region for sales, with the $36.82bn of recorded income representing 44.17% of total net sales for the quarter.
What would Apple Glasses do?
A successful launch of the "Apple Glasses" would complement its iPhone, Apple Watch, AirPods, and other devices to lock users into its ever-expanding ecosystem. It would also further reduce Apple's dependence on the iPhone, and possibly pave the way for the launch of its "Apple Car" several years later.
What services will Apple provide in 2020?
Strong shipments of the iPhone, which generated half of Apple's revenue in 2020, should tether more users to its growing services ecosystem, which includes the App Store, Apple Music, Apple TV+, Apple Arcade, Apple Pay, and other services.
How much will Apple's revenue increase in 2021?
Analysts expect Apple's revenue to rise 21% in fiscal 2021, then grow another 4% in 2022. Most of that growth will come from new hardware devices and the expansion of its services ecosystem.
When will Apple make the electric car?
Analysts expect the car to launch sometime between 2024 and 2027, and think it will likely sport a full suite of Apple's software and AR services.
When will Apple release AR glasses?
Apple is reportedly developing an augmented reality (AR) headset, according to The Information, with a target launch date of 2022. It could follow up that device with a lighter pair of AR glasses in 2023.
Is HoloLens a developer device?
Microsoft's HoloLens is still a pricey developer-oriented device, while Facebook reportedly plans to expand its Oculus VR business into the AR market with lightweight glasses between 2023 and 2025.
Who is John Mackey?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
