Apple expected to return $300 billion to investors in 3 years

“Apple will report Mar-19 earnings after market close on Tuesday, April 30th,” Gene Munster and Will Thompson write for Loup Ventures. “We continue to believe that Apple will be the best performing FAANG stock in 2019.”

“Strength of Services is leading the business until the 5G iPhone cycle. Anticipation will start to build in late 2019 and we expect a 5G product in late 2020,” Munster and Thompson write. “For Mar-19, we expect revenue and earnings slightly better than consensus of $57.6B and EPS of $2.37, implying a 5% revenue decline, a similar decline to Dec-18. We expect Apple will add $100B to the buyback and increase the dividend by 16%.”

“Getting to net cash neutral is one of Apple’s biggest levers to move shares higher. We expect Apple to be net cash neutral in 3 years, ahead of investor expectations of 5 plus years,” Munster and Thompson write. “To become net cash neutral, Apple will have to reduce its cash balance by almost $150B. We expect Apple to return $300B to investors in 3 years (cash from operations + cash draw down from balance sheet), with ~85% through buybacks.”

Read more in the full article here.

MacDailyNews Take: As Jim Cramer often says of Apple: Don’t trade it, own it.

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