Apple shares reach highest level in a year following strong earnings, stock split & larger buyback
Apple's stock has skyrocketed since last week's March quarter earnings report, in which the company excited investors with strong iPhone sales, a higher quarterly dividend, a larger share buyback program, and an upcoming 7-for-1 stock split [updated].
Shares of AAPL were up nearly 3 percent as of afternoon trading on Monday, with a high during the day of over $590 per share. Shares are up more than $60 from its trading price just before Apple reported earnings last Wednesday.
Update: AAPL closed at $594.09 per share on Monday, its highest closing price in over a year.
After Apple's surprising March quarter, analysts on Wall Street responded positively, and many of them raised their price targets. Among investment firms tracked by AppleInsider, RBC Capital Markets, Cowen and Company, Evercore Partners and Canaccord Genuity all saw fit to raise their targets, while Cantor Fitzgerald held steady with its prediction of $777, the highest among major firms.
Apple's gains on Monday set a new 52-week high for the company. Shares of AAPL had tumbled from late-2012 through mid-2013 after reaching an all-time high north of $700 in September of 2012.
The company's stock surge has placed Apple out of a projected "valuation range" from Wells Fargo analyst Maynard Um. Um revised his numbers last week to predict that shares of Apple would trade between $515 and $585 for the foreseeable future, but Monday's gains pushed the company above that $585 upper tier.
The gains come after Apple beat expectations by earning $10.2 billion in quarterly net profit, driven by record sales of 43.7 million iPhones. The company also increased its share buyback plan to $90 billion through 2015, which it is expected to help finance with what could be come the second largest bond sale in corporate history.
Investors will also benefit from a new, larger quarterly dividend payout of $3.29 per share, and Apple executives have pledged to revisit and likely increase that dividend on an annual basis.
Finally, Wall Street watchers are excited about an upcoming 7-for-1 stock split, set to take place on June 2. Each shareholder of AAPL as of that date will be awarded six additional shares, which will be reflected when split-adjusted trading begins on June 9.
These capital allocation plans are made possible by Apple's massive $150 billion cash pile, which continues to grow as a result of the company's high margins and continuing record sales of its blockbuster iPhone lineup. Investors are hopeful that new products from the second half of 2014, including an anticipated refresh to the iPhone lineup potentially with larger displays, will further drive growth and profitability for the Cupertino, Calif., electronics maker.
Shares of AAPL were up nearly 3 percent as of afternoon trading on Monday, with a high during the day of over $590 per share. Shares are up more than $60 from its trading price just before Apple reported earnings last Wednesday.
Update: AAPL closed at $594.09 per share on Monday, its highest closing price in over a year.
After Apple's surprising March quarter, analysts on Wall Street responded positively, and many of them raised their price targets. Among investment firms tracked by AppleInsider, RBC Capital Markets, Cowen and Company, Evercore Partners and Canaccord Genuity all saw fit to raise their targets, while Cantor Fitzgerald held steady with its prediction of $777, the highest among major firms.
Apple's gains on Monday set a new 52-week high for the company. Shares of AAPL had tumbled from late-2012 through mid-2013 after reaching an all-time high north of $700 in September of 2012.
The company's stock surge has placed Apple out of a projected "valuation range" from Wells Fargo analyst Maynard Um. Um revised his numbers last week to predict that shares of Apple would trade between $515 and $585 for the foreseeable future, but Monday's gains pushed the company above that $585 upper tier.
The gains come after Apple beat expectations by earning $10.2 billion in quarterly net profit, driven by record sales of 43.7 million iPhones. The company also increased its share buyback plan to $90 billion through 2015, which it is expected to help finance with what could be come the second largest bond sale in corporate history.
Investors will also benefit from a new, larger quarterly dividend payout of $3.29 per share, and Apple executives have pledged to revisit and likely increase that dividend on an annual basis.
Finally, Wall Street watchers are excited about an upcoming 7-for-1 stock split, set to take place on June 2. Each shareholder of AAPL as of that date will be awarded six additional shares, which will be reflected when split-adjusted trading begins on June 9.
These capital allocation plans are made possible by Apple's massive $150 billion cash pile, which continues to grow as a result of the company's high margins and continuing record sales of its blockbuster iPhone lineup. Investors are hopeful that new products from the second half of 2014, including an anticipated refresh to the iPhone lineup potentially with larger displays, will further drive growth and profitability for the Cupertino, Calif., electronics maker.
Comments
I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.
The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.
...and less of a dent as Apple marginalizes them going forward. How's that stolen OS IP working out for you, Eric?
Well that's equal to an over $700 stock price pre-split. It won't be an easy road to that price unless they have an announcement of something new anyways.
I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.
The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.
Stock splits do not "dilute value."
If you get change for a $20 and pay no fees, your 3 $5s and 5 $1s are still worth the same.
The only thing that dilutes shareholder value is when a company issues more shares, which most tech companies do as they recruit & retain employees. Buying back shares does the opposite, "concentrating" value of shares.
So Apple buying back shares is the opposite of dilution, and the split has ZERO impact on (the price per share * shares outstanding). Zero.
As noted by sog35 above, Google's split was different in that it didn't just split its stock: it cut the value in half and paid holders a "dividend" of stock worth the same on paper, but without any voting rights. Google diluted the voice of shareholders. Apple's 7-1 split has no impact on votes because there will just be 7x as many shares, and current owners will have 7x as many. That's zero effective change.
Also, Apple just closed at $594.09 up +22.15 (3.87%) for the day.
I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.
The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.
Why look at google after the split, when you can look directly at Apple after the split? 1987, 2000, 2005.
Made me rich.
…and, oh yeah, "Killer new product over next 12 months"… You really betting "against" that??
Good luck.
I am curious why would think big boys care about the split, it makes zero difference mathematically. Same with the 'dilute argument, it makes no difference to anything. As many have said it only makes a psychological and affordability per share issue and they are real benefits to many small scale buyers. Anecdotally, I already know of a several folks about to but a share each for grandchildren since it is now 'affordable' to this when you have a few grandkids.
As to you not seeing it go over $100 post split in the next 12 months ... care to wager on that?
Google's issuance of Class C stock did not create any new votes, nor did it remove any votes from the owners of the Class A stock (who received the newly issued Class C shares on a one for one basis). The voice of the shareholders is just as diluted or concentrated as it was before the issuance. If someone sells their Class A shares and keeps their Class C shares, their voice will disappear, obviously (but then it will be owned by another person, so no real change in the "voice of shareholders").
1) I don't know what defines "killer" in your eyes but I bought a new iPhone, iPad mini and 15" MBP in 2013 because they were "killer" products to me. I suspect I'll be buying a "killer" new iPhone this year and quite possibly be buying a "killer" new MBP in 12 months (although perhaps a little longer depending on when 2nd cycle of updates occur, or much sooner if they change the casing or something else, like adding TouchID). This is all without even considering a new product category which they likely won't even announce unless it's "killer" which I think is coming to a head with their push for more and more R&D.
2) Without the split that would be $700 per share. You don't really think that with Apple's amazing revenue, profits (which are higher than Google's revenue), buybacks, and all all their annual product releases that it would be impossible to go up $100 per share? I think it's easily possible considering it was below $500 ($100 lower than today) back in January/February of this year. That's not too long ago.
Steve Jobs would never do a stock split.
/s
I read somewhere that APPL is up on the new report of increased market share in Europe and Japan. That makes sense to me. The stock split and the stock buyback wouldn't cause another 20 point jump. That has already been factored in for two day. Look at the near stagnate price since opening up on Tuesday.
You said it! Very, very exciting.
A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.
More people are slowly starting to question their vaporware, the lack of hardware profit.