Why Carl Icahn believes Apple’s share price should be $240

“Carl Icahn still thinks Apple is ‘dramatically undervalued’ and upped his price target again on Monday,” Lauren Gensler reports for Forbes. “In an open letter to Apple CEO Tim Cook, billionaire activist investor Carl Icahn detailed why he thinks Apple is misunderstood and encouraged the tech giant to repurchase still more of its shares.”

“Icahn raised his price target to $240, up from the $216 he said Apple stock was worth just a few months ago and 86% higher than Apple’s closing price on Friday,” Gensler reports. “Icahn’s price target stems largely from his optimism that Apple is making an entrance into television and cars.”

“To arrive at the $240 per share he thinks Apple’s stock should be trading at, Icahn is forecasting earnings of $12 per share in fiscal 2016, which is significantly higher than the consensus on Wall Street,” Gensler reports. “Icahn also values Apple at 18 times earnings, higher than the market’s multiple of 10 times and more in line with the S&P 500′s multiple of 17 times.”

Read more in the full article here.

MacDailyNews Take: Theres’ no question that Apple is misunderstood by Wall Street in general.

Related articles:
Carl Icahn issues open letter to Apple CEO Tim Cook – May 18, 2015
Apple expands capital return program to $200 billion – April 27, 2015
Here’s why Carl Icahn wants even more Apple buybacks and why CEO Tim Cook has to pay attention – October 9, 2014

14 Comments

    1. Even though it would be *bad* for me, IF you think there should be any income tax at all, why should capital gains be taxed any different than ANY other kind of income?

    1. I’m willing to bet if Icahn said Netflix was worth $1000 it would probably reach that number in a week. With Apple, forget it. Nothing is going to move Apple’s share price short of a nuclear explosion. Big investors simply can’t be convinced Apple is worth very much in terms of growth.

      Maybe because Apple’s market cap is as high as it is. With a P/E of 15.5, Apple’s market cap doesn’t bother me at all but then again I’m not expecting Apple to double the share price. A 20% to 25% share gain in a year is still far better than any bank interest rates.

  1. I hate the bloodsucking, parasite and vulture, but he’s right about the what Apple’s worth, the PE, the analists/the markets not having a clue about the company and therefore underestimating it.

    In this case forget thinking different, it would behoove them to just think.

    1. “Hate” is a bit of a strong word for someone you don’t really know, unless you’re trying to wear it as a badge of honor, in which case it means something else entirely. Regardless, you certainly don’t need to like him but you should understand how he operates.

      Icahn looks to profit where he sees weakness in a company’s management or where he sees market inefficiencies. This is not an inherently evil act. Every business out there is trying to do the same thing in one form or another by seeking to gain an edge on their competitors or by tripping them up in the marketplace.

      It does become complicated when non-decision making employees lose their jobs through Icahn’s actions. But you must understand that this can only happen in companies encumbered with poor management to begin with. And with that being the case, the employees are at risk anyway. Is Icahn really to blame? Who can say. Sounds like a philosophy question to me.

      But yes, he is right about Apple.

  2. What an egomaniac, “thank you for taking our advice and running your company exactly as WE told you to do.” Please! Eff off douche, Apple is polite because you’re an insanely wealthy shareholder, but I doubt they give a feck what you think about the direction their company goes.

    1. But do you disagree with his letter?
      Im sure he is not enlightening apple and some apples core followers..
      But what he says is not so off from how i see things.. ( just maybe a bit of timing issues here and there… And some of tge capital return strategies )?

    2. Actually, Apple and inside directors like Tim Cook do owe shareholders a fiduciary duty.

      As one of those shareholders, I say, “thank God for Uncle Carl evangelizing Apple!”

  3. He might as well give it up. Wall Street will never recognize Apple and give it a fair premium along with the rest of its tech company peers of the S&P 500. Wall Street values Apple less than Microsoft and that’s a complete insult to Tim Cook and crew. Apple was one of the few companies who had good earnings and all it did was compress Apple’s P/E while the P/E of other tech companies expanded. Apple shareholders are getting royally screwed as the hedge funds continue to dump Apple out of some vague fear of Apple’s doom. Day after day of listening to how iPhone growth will suddenly come to a halt has to be scaring off investors. It’s just ridiculous how many articles are constantly criticizing everything Apple does.

    Apple at $200 a share seems like a high jump over the moon. I can barely see Apple reaching $145 by the end of the year. Wall Street is going to beat the hell out of Apple every chance it gets by claiming the company isn’t worth much because of zero growth potential. As though Wall Street can actually read any company’s future with some crystal ball. It’s impossible to accurately predict the future of any company but Wall Street is constantly fully valuing companies on some vague future value. The crooks are running Wall Street. Icahn has to be the only person on the planet who thinks Apple has any potential to that degree, so I’ll pretty much ignore him. I’m certain he’s not going to get an awful lot of big investors to agree with him.

  4. Microsoft should realistically be priced at a buck 25 cents and Google will be worth about a dime after their exclusive license to the page rank search algorithm expires.

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