Munster: New Apple Products Could Have ‘Big Impact’ on Price Multiple
Piper Jaffray analyst Gene Munster shared his views on what investors can expect at Apple’s (NASDAQ:AAPL) annual shareholder meeting that is being held in Cupertino today during a recent appearance on CNBC. After observing that investor meetings don’t tend to bring “a lot of news,” Munster noted that, “There’s a one in ten chance that Peter Oppenheimer announces some kind of retirement.” According to Munster, rumors of Oppenheimer’s pending retirement have been circulating since last year.
Besides a potential Oppenheimer retirement announcement, Munster expected that the meeting would otherwise mostly consist of complaints from investors who are concerned about a perceived lack of innovation at Apple. Apple shareholders were previously expecting to witness a showdown between Apple management and activist investor Carl Icahn. As noted in an open letter to Apple shareholders, Icahn had been seeking a $50 billion expansion of Apple’s share repurchase program that was opposed by Apple’s board and management. However, Icahn announced he was dropping his proposal earlier this month after CEO Tim Cook revealed via the Wall Street Journal that the company had recently repurchased $14 billion of its own shares.
Munster also shared his perspective on the potential impact that Apple’s rumored new products will have on the company’s share price. Although the Piper Jaffray analyst observed in a recent note to investors that new products alone won’t significantly add to Apple’s bottom line, he believes that excitement about a new product could boost Apple’s share price in the short term. “There’s two phases to the stock,” Munster told CNBC. “The near term, the next six to twelve months is on the trade, which is what you’re talking about. Our opinion is that it’s hard to say how much they’re going to add. We think it will be about ten percent for two product categories. But probably the bigger impact of the stock is the multiple going up. They get the products in their hands and they get a little excited,” said Munster.