Analyst: And Here’s Why All’s Good With Apple
Apple (NASDAQ:AAPL) is back in the green after several analysts reacted to the stock’s more than 6 percent decline on Wednesday by offering optimistic views, and the company received other positive catalysts such as the start of its T-Mobile partnership. Oracle Investment Research was one of the analyst firms suggesting doomsday was far from arriving for the iPhone maker.
The firm upgraded Apple stock from Buy to Strong Buy with a $670 price target, noting the easing of supply chain issues, strong demand, and compelling valuation issues. The firm’s Laurence Balter told Barron’s that the slip in Apple’s stock was possibly a result of firms increasing margin requirements after the Rochdale Securities sham trade that led to massive losses for the trading firm and in a trader being criminally charged.
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The research group also considered the much-debated question of whether Apple should initiate a special dividend and decided it probably wasn’t the best idea.
“Would shareholders be better off with a special dividend given the massive amount of cash on the balance sheet?” the firm asked in its note “Or would they be better off with a share repurchase. What our model shows is that a share repurchase would be a smarter move and lead to a better use of capital (an internal rate of return of ~17 percent) versus a one-time cash payout — in our minds that is what ultimately counts.”
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