“J.P. Morgan hardware analyst Mark Moskowitz today reflects upon what could restore the ‘What’s Next?’ appeal of Apple (AAPL), after a 24% year-to-date drop in the shares (actually almost 27% with today’s decline), and concludes that large debt issuance could be a part of it as some point,” Tiernan Ray reports for Barron’s.
“‘Investor concerns related to revenue deceleration, increasing competition, gross margin deterioration, and there being no ‘what’s next?’ have impaired the stock’s risk-reward profile,’ given that ‘what’s next’ was robbed from the start of this year by a flurry of new product in the fall of last year, as he sees it,” Ray reports. “Moskowitz also joins a chorus of those suggesting Apple could do a large debt issuance in order to boost dividends or buybacks: ‘In our view, we think that Apple could be on the brink of driving a major leveraging up. With the company’s cash pile growing and historically low borrowing rates, we think that investors should start to consider what the expanded cash uses could be if Apple takes on $15 billion, if not $20-25 billion, in unsecured debt in the near to mid term.'”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]