Citigroup: Apple will more than double buybacks due to Tax Cuts and Jobs Act

“Apple’s capital return plan will get much larger, according to one Wall Street firm,” Tae Kim reports for CNBC.

“Citi Research reiterated its buy rating for Apple shares, saying the company will use tax reform proceeds to significantly increase its stock buyback and dividend program,” Kim reports. “Analyst Jim Suva wrote in a note to clients Wednesday, ‘Looking ahead, we expect investor focus to be on the impact from Apple’s capital returns strategy, which we estimate could be a $100 billion increase, the 2H18 lineup, and continued strength in Apple’s Services segment.'”

“Suva said a $100 billion increase is double the amount Apple has added in each of the previous two years,” Kim reports. “As a result, the analyst said Apple will more than double its annual share buyback, which averaged $32 billion a year in the last five years.”

Read more in the full article here.

MacDailyNews Take: Yes to buybacks!

When shares are undervalued, as Apple’s are, it makes sense for Apple to buy them back.

Why would any shareholder complain about Apple using repatriated funds for buybacks? – January 10, 2018
Apple expected to repatriate $214 billion to the U.S.; expect increased buybacks and dividends, not big acquisitions – December 22, 2017
Congressional Republicans deliver epic overhaul of U.S. tax laws to President Donald Trump – December 20, 2017


      1. You must have missed the part where EVERYONE in trumps administration claimed that this tax cut would primarily benefit the working class because ALL of the money would go to job creation RATHER than buybacks or dividends.

        THAT was their justification for the fact that 90% of this tax cut money goes to the top 2%. The wealthiest people and companies.

        Of course with the huge deficits this tax cut has required, medicare, infrastructure and healthcare will continue to see greater and greater cuts.

        All so very beneficial to trumps middle/lower class base (/s)

        As a stockholder I’m totally fine with APPLE doing this. My pockets are very good, thank you. But it does highlight the dishonesty coming from the white house on this tax cut.

    1. No, tax money returned to those who actually paid in. Those who haven’t paid in don’t receive and those that did receive it in proportion. How unfair in the world be?

  1. So, does Wall Street view those buybacks as a good thing or a bad thing? No matter what Apple does, it doesn’t seem to make the big investors happy. Tim Cook is not Jeff Bezos or Steve Jobs, so Apple will likely remain undervalued as far as how most major tech companies are being valued.

    It seems as though Wall Street wants that repatriated cash to be used to rapidly increase revenue growth and buybacks are not going to accomplish that. Apple isn’t even able to find a way to increase the P/E even a couple of points and big investors see that as a huge problem. Even I don’t entirely understand why having that much repatriated cash can’t move the P/E up slightly.

    I’m just a bit disappointed that not even one major acquisition can be accomplished to help Apple grow its revenue when other tech companies do it so easily. It’s hard for me to tell Apple is sitting on a mountain of cash because of the way Apple spends the money on things I can’t actually see.

    Intel Corp. puts out a line of new processors and other companies already have products ready to go into the hands of consumers. What does Apple have? Nothing. I haven’t heard Apple announce one product using those new processors. Is it that Apple can’t afford to update their computers like the rest of the computer industry? Why is that? What’s the point of having the money if they’re just going to sit on it. Wouldn’t it make sense for Apple to use what’s available to them to entice consumers? I really don’t understand Apple at all.

    1. Tim Cook is a hired hand, he will never fell the way Bezos or Musk about their companies, in short he won’t fight to the bitter end. Which is why Apple lets Google, Amazon, Netflix, and Facebook exist as parasites in some parts of iOS.

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