Apple Will Pay $65B To Investors Annually – RBC
Investment firm RBC Capital Markets is positive that Apple will be capable of returning $65 billion to investors yearly in the near future. Analyst Amit Daryanani therefore raised his price target of Apple shares to $140 from $130.
The company will be announcing its capital return program in April. Tim Cook had recently said that Apple is planning in returning excess capital to shareholders because the company is not interested in being cash hoarders.
RBC said Cook’s remark is another compelling reason to buy the Apple stock. Daryanani is confident that Apple will announce its $65 billion capital return program for 2016 as hinted from Cook’s announcement.
Daryanani highlighted that Apple amassed $34 billion in cash in its first quarter of 2015. The company will continue to amass $66.6 billion in cash for the rest of the year, an addition to the $179 billion in cash it already had at the end of the December 2014.
Daryanani is expecting for Apple to return 100 percent of its free cash flow to investors. He said the company has products in the pipeline that can bring this expectation to reality. The Apple Watch in April and the growth in Apple Pay will bring Apple stock price higher, Daryanani wrote in a note to investor obtained by AppleInsider.
$5 billion going to $150 billion Going to $200 billion
RBC Capital Markets reiterated its outperform rating on Apple stock. It offers an “upside scenario” where Apple can reach $150 as well as a downside scenario where the shares will go down to $100.
In a separate interview with CNBC, Daryanani said Apple can achieve a capital return program amounting to $150 billion to $200 billion in a span of three years.
“I know it’s a big number. What’s interesting, though is the amount of free cash flow Apple is going to create over three years… they actually reflect the fact that Apple’s generating a ton of cash and they already have a big pile of cash on the balance sheet,” Daryanani told CNBC.