Apple shares soar after stellar earnings report

“Shares of Apple were up close to 9% in premarket, after earnings and revenue late Wednesday topped Wall Street forecasts and the company announced a 7-for-1 stock split,” Barbara Kollmeyer reports for MarketWatch. “Also: Apple’s split could pave way into Dow industrials, for whatever that’s worth.”

“If Apple matches that gain during Thursday’s regular session, it would be the best day for the stock since April 2012, when it rose 8.9%,” Kollmeyer reports. “Futures for the Nasdaq 100 surged 49.75 points, or 1.4%, to 3,607.25, while those for the S&P 500 index rose 7.6 points, or 0.4%, to 1,880.50. Futures for the Dow industrials added 39 points, or 0.2%, to 16,499.”

Full article here.

“Analysts at J.P. Morgan Thursday lifted Apple’s price target to $623 from $585, while reiterating their overweight investment stance,” Peter Nurse reports for The Wall Street Journal. “‘We believe that AAPL has the ability to outpace expectations by tapping the $63bn sub $1,000 laptop market with iAnywhere as well as new products like the iPhone6 and iWatch,’ said J.P. Morgan, in a note to clients.”

“Over at Goldman Sachs, analysts have lifted the 12-month target price to $620 from $610, while keeping a buy rating,” Nurse reports. “‘We now forecast FY2014 revenues of $182.03 billion and EPS of $44.70, from $181.24 billion and $44.51 previously,’ Goldman Sachs said. ‘Bottom line: this installed base growth provides a far more robust platform for future device growth (old and new categories) than the bulls or bears previously believed.'”

Read more in the full article here.

MacDailyNews Take: We believed. 🙂

Those who underestimate Tim Cook do so at their own peril.MacDailyNews, February 25, 2013

Related articles:
Apple’s 7-for-1 share split makes joining the Dow more likely – April 23, 2014
MacDailyNews presents live notes from Apple’s Q214 Conference Call – April 23, 2014
Apple announces 7-for-1 stock split; boosts dividend, ups buybacks to $90 billion – April 23, 2014
Apple smashes Street with revenue of $45.65 billion in Q214 – April 23, 2014


    1. Check out the FUD that Raymond is spreading on other sites. He must be @ the top of the SamDung pile payroll.

      18 hours ago 1 1
      Before Apple puts out a new product they need to make sure it works the way it is supposed to. I bought a new IPhone 5s on Thursday and returned it on Saturday because I could not get coverage in many places including my home, I have the IPhone 4 and have had no problems at all with it so I know it has nothing to do with where I live. I went online and found that I am not the only one having this problem with IPhone 5s, it seems to be quite common all over.

      Fuck You RayHole

  1. With a lower value per share, changes in the price will be equivalent to large percentage gains/losses, and analysts seem to think percentages are physical values, so this will be good news. Fickle twats.

    1. Buying back shares reduces the amount of outstanding shares on the market ( which increases the value of each remaining share, because there are that many less to divide to).

      If Apple buys back, (for example) 5% of the (whole) float, it makes no difference whether the shares are priced at $520 per share or $80 per share…except that at $80 per share there are 7 times as many shares, but they still represent 100% of the float…

      Hence: 5% of the whole remains 5% of the whole whether the whole ( # of outstanding shares) is 880,000,000 shares or whether the whole is 880,000,000×7 ( post split) = 616,000,000

      1. More importantly, demand for a share of Apple stock can increase at the lower price point. That will tend to put upward pressure on the price as more people looking to invest bid on the available shares being offered on the market. That is the law of supply and demand. There are fewer willing and able buyers at a $500-$700 price range than there will be at a $75-$150 price range. Almost anyone can pry lose a spare $100 to buy a share of Apple at the end of the month at the under $100 price per share, but over $500? Not so much.

    2. As breeze said, accessibility is the issue. Buying a round lot (100 shares) at $560 per share cost $56,000 plus the transaction fee. A 7:1 split means you can purchase a round lot for $8,000 (assuming no escalation in the share price). As you have seen, the AAPL 7:1 split coincided with a very good quarterly earnings report in the face of analyst pessimism, thus driving up the price of AAPL.

      Technically, a stock split merely divides the ownership of the corporation into smaller pieces with the total value remaining unchanged. In practice, a stock split implies confidence on the part of the corporation and the greater accessibility spurs buying by smaller investors, both of which can provide a modest post-split boost.

      Apple’s stock buyback program is expressed in terms of $, not shares. As breeze said, if Apple repurchases $10B of AAPL, it will still represent roughly the same percentage of the whole pre- and post-split. Post-split there will be seven times as many shares outstanding and each stock buyback will repurchase about seven times as many shares as that dollar amount would have pre-split. However, if the stock split ends up driving an upward trend in the price of AAPL, Apple may moderate its stock buy back plan a bit and wait for opportunities to buy on the dips.

      Don’t worry too much about the split, other than to understand that it is a modestly “good thing” that might spur investment in AAPL.

    1. althegeo, I agree that Apple does not chase market share or profits as a primary goal. Those performance metrics are the result of Apple’s long term strategy of creating great products and providing a superior user experience.

      But, for those new to Apple who are reading your post, I would like to point out that Apple has sold MacBooks below $1000. In fact, the *current* 11″/128GB MacBook Air sells for $999 at full retail, and there are several models of the MacBook Air and MacBook Pro selling for less than $1200. When Apple can create worthy laptops for under $1000 and still maintain reasonable margins, then it does so. But Apple won’t strip down a machine to shoehorn it into a price point. That’s is one of the many things that I respect about Apple.

      Again for those new to the Apple ecosystem, I would like to emphasize that Apple generally provides great value over the life of a product. Although Apple products are often derided as costing too much, I have found Apple’s prices to be reasonably competitive when comparing similar systems at the medium and high-end, and Apple products tend to last longer and maintain their utility for longer than products from Apple’s competitors. I generally keep my home computers for six to seven years before buying a new one. During that time frame I typically upgrade the HDD, add memory, and replace the mouse. That’s it. Apple desktops and laptops have always served me well, and my PC-using friends often go through two or three computers in the same timeframe (which offsets the apparent cost advantages of “budget” PCs). If you add peace of mind into the equation, I come out way ahead.

  2. For those that are loudly and jubilantly crowing, I wonder how many of you were radically opposing Icahn’s suggestions months ago? Seems Apple (through Cook) has done much of what Icahn requested. Maybe not to Icahn’s original magnitude, but still it is the same thing and more along the lines of what Icahn was suggesting before he went quiet.

    I still oppose what Apple is doing in the finance world (borrowing more money to pay higher dividends and buybacks). I don’t care about the split. It is effectively a wash and the number of “new investors” due to the smaller per share price will be tiny compared to the holdings of the large institutional investors.

    Let’s see what Icahn and his ilk do now. In a few days will they take their profits and run, or will they still claim that Apple is undervalued and buy more?

    1. Apple incidentally doing some things Icahn demanded is about the same as Apple incidentally doing some things Greenpeace demanded. They might both claim credit for starting the ball rolling, chances are they’d both be wrong.

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