Apple's Share Buyback Potential Unmatched, RBC Raises Target To $390

Apple Inc. AAPL is in “a league of its own” in terms of share repurchases, as it can continue its current pace of buybacks through mid-2023 even with no organic growth, according to RBC Capital Markets.

The Apple Analyst: Robert Muller maintained an Outperform rating on Apple and raised the price target from $345 to $390.

The Apple Thesis: Even in the absence of any organic growth, Apple could generate earnings at a compounded annual growth rate of 3.5% over the next five years, Muller said in the Wednesday note. (See his track record here.)

In the zero organic growth scenario, the company could continue its pace of repurchasing around $70 billion inshares annually through mid-2023, the analyst said.

After this period, the company could repurchase around $45 billion worth of shares “indefinitely” without its net cash position being impacted, he said. 

Apple could continue this pace of buyback activity while maintaining nearly $15 billion in annual dividend payments, Muller said. 

Cupertino's prospects from the upcoming 5G upgrade cycle are underappreciated by the market, as is the recent robust growth in Wearables and Services and any potential future product innovations.

AAPL Price Action: Shares of Apple were up 0.75% at $354.71 at the time of publication. 

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Photo courtesy of Apple.