Analyst: Apple Has Much Explaining To Do
Apple (NASDAQ:AAPL) acknowledged some investor concerns last week by reacting to Greenlight Capital’s statement about the company’s capital allocation practices. But is this enough? According to Barclays Capital’s Ben Reitzes, the iPhone maker now needs to take the next step by hosting analysts who advise its shareholders.
According to Reitzes, Apple has reached a mature business stage from where it can offer its investors guidance about how its “legendary business model” can keep delivering steady returns. Most tech companies are known to have such an Analyst Day, but Apple has refrained from conducting one since 2003.
Such an event would give Apple the chance to make a case that it can increase revenue over time by “mid to higher single digit” percentages, increase profits in the double digits, and raise the dividend by double digits as well. “Right now we believe that investors are factoring in a sub-10 percent long-term EPS growth rate for the company,” Reitzes writes.
While the analyst does not think Apple will actually follow this recommendation, he does have a list of topics he would like to hear about from the company.
Firstly, he wants Apple to talk about how it is a platform company and how that helps it achieve revenue stability. “Apple needs to prove that its platform is what makes it much different from fallen angels like Research In Motion (NASDAQ:BBRY), Nokia (NYSE:NOK) and Motorola (NASDAQ:GOOG) – and more like Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), or Google,” the analyst writes.