Between record-setting buybacks, a stellar 12-month run and yet another highly anticipated product release in the works, it’s pretty safe to say Apple (AAPL) is downright running things right about now.
In case you somehow missed all that, the tech giant has been generously snapping up shares of Apple stock, to the tune of $18 billion in repurchases during the first quarter … on top of the $16 billion it spent in the second quarter of last year. Yes, those two self-shopping sprees make for “the two biggest buybacks by any company in data compiled by S&P starting in 1998,” as Bloomberg reported.
Plus, those buybacks came on top of a monster 7-for-1 stock split that supposedly made AAPL shares far more attractive and accessible to more investors.
Both moves likely played a role in Apple stock chugging higher and higher. Since the start of 2014, AAPL shares have appreciated by 18%. Zoom out a year, and shares have a whopping 43% climb in the books — gains that are three times more than the Nasdaq’s.
For the cherry on top, we are quickly approaching the anticipated Sept. 9 unveiling of the new iPhone 6 — and as you can likely guess, or have heard, rumors are already swirling.
Of course, the biggest question that comes as a result of all this success is obvious: Can Apple stock keep it up?
Let’s round up some expert and analyst sentiment around AAPL:
Analyst Consensus. Analysts think Apple stock still has some room to climb, with the $106 mark representing both the mean and median estimates. On top of that, 15 analysts rate it a “strong buy” (or something similar), while 27 more have some sort of “buy” rating on it. One reason for the optimism: Analysts are expecting 11% earnings growth per year in 2014 and 2015, both above the industry average.
AAPL Shares to $120. Daniel Sparks of The Motley Fool thinks that median target is a bit low, though. He recently wrote that Apple stock could be worth $120 per share — a significant 27% more than Friday’s closing price. Daniel points to intangible assets including the company’s strong premium-demanding brand, its “sticky” ecosystem of products, and its scale. Finally, he dives into a discounted cash flow model to round out his bullish case, which you can read about more here.
Short Apple Stock. Of course, there’s one in every crowd — the hater, the skeptic, the short. Brian Kelly thinks that the best is over for Apple stock and actually announced late last week that he decided to short shares of AAPL. Why? Well, he thinks that good news is already built into the Apple stock price, and that the run-up looks far too much like 2012. In case you forgot, AAPL was on a roll leading into the iPhone 5 release at that time — but then began one ugly downward slide.
Is the iPad Irrelevant? Even if others aren’t calling on investors to short Apple stock, there is more reason for concern. A USA Today article, for example, pointed to the fact that “Apple shipped 9.3% fewer tablets during the second quarter, a surprising decline from the same period a year ago.” While the piece notes that the iPad’s sliding relevance is hardly a death blow for Apple stock, it could be problematic considering other gadgets like the Apple TV haven’t materialized either.
If the iPhone 6 ends up being a flop, that lack of diversity might make Brian Kelly’s call a killer one.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.