$170B-$180B Apple Capital Return Possible: Piper Jaffray (AAPL)
Apple Inc. (NASDAQ:AAPL) is expected to announce an update to its capital return policy when it reports its Mar-15 earnings, and Piper Jaffray analyst Gene Munster believes that $170 billion to $180 billion is the most likely range for Apple’s capital return policy.
In a research note issued today, Mr. Mahaney wrote, “Last year, Apple increased its share repurchase from $60 billion to $90 billion and increased its dividend by 8% to $11 billion annually. If you assume Apple follows a similar path as last year, adding $30 billion to the share repurchase and increasing the dividend by ~8-9% to $12 billion annually, the headline capital return number would increase to over $170 billion from the previously announced $130 billion.”
Additionally, the analyst sees potential for $40 billion in new buybacks, which would imply an “over $180 billion” capital return headline number when adding a year’s worth of dividends. Thus he views the $170 billion number as outlined in the prior paragraph and the $180 billion outlined in this as the most likely range for Apple’s capital return policy.
The analyst maintained an Overweight rating on the stock, with a price target of $160, which implies an upside of 25% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 28.0% and a 71.9% success rate. Munster has a 31.6% average return when recommending AAPL, and is ranked #2 out of 3574 analysts.