In trading session on Thursday, Apple Inc.(NASDAQ:AAPL) witnessed an end to its seven-session win as its shares dropped $0.26 thus closing at $128.45; although, the company’s shares did witness a $129.03 intraday all-time high.
AmitDaryanani, the covering analyst for RBC Capital Markets’ stated that free cash flows could increase Apple Inc’s(NASDAQ:AAPL) share price. He believes that Apple Inc.(NASDAQ:AAPL) will be able to increase its buybacks in shares as well as its dividends with the increase in free cash flows. This is expected to increase along double-digit percentages in the coming 2016.
The analysts also noted that Apple Inc.(NASDAQ:AAPL) was able to increase capital returns as years went by. The tech giant offered share buybacks of $45 billion, $100 billion and $130 billion in 2012, 2013 and 2014 respectively. The team at RBC Capital Markets’ has full faith that the company will increase this figure over $200 billion in the next three years.
With reference to historic figures, Daryanani along with RBC think that Apple Inc.(NASDAQ:AAPL) will be able to produce nearly $66.6 billion free cash flows in 2015. This amount is more $50.1 billion more than the free cash flows that the company had for 2014. They also predict that the company will have $73 billion in free cash flows in 2016.
RBC Capital states that Apple Inc.’s(NASDAQ:AAPL) worth is nearly $140 with the company’s net cash at $178 billion along with 44% of free cash flows to be generated in America. With $140, Apple Inc’s(NASDAQ:AAPL) worth is $815 billion.
The question that investors should ask here is whether or not Apple Inc.(NASDAQ:AAPL) can reach the $800 billion valuation or not. The premise for this is that Apple Inc.(NASDAQ:AAPL) should be a growth company. Considering that it is, there is a chance that it will get to $800 billion somewhere in the future.
The Q1 results that Apple Inc.(NASDAQ:AAPL) posted and the product introductions it has made recently do tell us that it is certainly a growth stock. How can we forget the 74.5 million in iPhones that the company sold in the holiday season and its Apple Pay introduction to the market? As if this weren’t enough, the company is also preparing the market for its Apple Watch launch this year. However this news has grown weary in front of the Apple car that the company is set on launching in 2020.
Considering the innovations don’t come out as we expect, Apple Inc.(NASDAQ:AAPL) still has a lot of growth coming in from the developing and emerging markets. The company thinks that the already maneuvered moves that it made in Russia, China and other growing markets will help it sustain sales growth thus keeping its performance intact.
Excluding the cash factor, the tech giant is still inexpensive with the innovations that it launched and is planning to launch in the near future. Investors would want to consider holding this stock considering its heavy long term growth affects.
