1. Akshay Masand's Avatar


    With shares of Apple stock continuing to gain value, RBC Capital Markets have been prompted to raise its price target for Apple for the second time in many weeks. Analyst Amit Daryanani issued a note to investors recently revealing its new price target of $645, up from a previous forecast of $625. Following Apple’s surprisingly strong second quarter results from last month, Daryanani had already increased his target from $590.

    The analysts 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 roughly $44 billion in share through December of 2015, implying more than $6 billion in buybacks per quarter. The newly increased buyback suggests that Apple will buy an additional 50 million shares at an average price point of $590.

    In addition to its higher price point, the analyst also ended up increasing the fiscal year 2015 earnings per share estimate by more than a dollar to $48.96. He 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 up the price of the stock even higher.

    Shares of Apple stock appear to be 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 higher than $599 last week, eventually retreating after finding resistance at the $600 barrier.

    We’ll have to wait and see how it fares as time goes on.

    Source: RBC Capital Markets via AppleInsider

    Twitter: @AkshayMasand
    2014-05-06 07:52 AM
LINK TO POST COPIED TO CLIPBOARD