Tiernan Ray reports for Barron’s, “Morgan Stanley’s Katy Huberty today opines that a higher cash return from Apple (AAPL) could be a ‘catalyst’ for the shares, writing that Apple’s projected return of free cash flow [FCF] of 36%, between dividends and buybacks, is well below the average of 68% for IT companies in the Standard & Poor’s 500 — a 6% yield, which would be an amazing $28 billion annually.”
Ray reports, “Huberty, who has an Overweight rating on Apple shares, and a $630 price target, writes that adding that additional $13 billion annually is ‘a viable option given our conservative FCF estimates assume Apple generates $21B of US FCF this year and would still end the year with $36B of US cash on hand.'”
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