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Apple (NASDAQ: AAPL)’s iPhone 6 will take the Share Price up

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By on Technology & Software

Apple (NASDAQ: AAPL) launched its iPhone 5 about two years ago. The new phone showed many improvements over the previous versions like custom cores of CPU, aluminum chassis and a better display. Even though the phone was successful in the market, however, it resulted in margin compression which affected the company’s bottom line.

Apple (NASDAQ: AAPL)’s market cap was at an impressive value of $663 billion. The presplit price per share was $705. Currently the company’s stocks are priced at $670. But the current market capitalization of the company is still lower than the peak value achieved by the company. Apple (NASDAQ: AAPL)’s current market cap is $577 billion. This is all thanks to a buyback program which has proved not only friendly for shareholders but also very aggressive.

In 2012 fiscal year, the company earned a net income of $41.7 billion. In order for Apple (NASDAQ: AAPL) to retain its market capitalization high, the company must trade at $110. In 2013, the company’s income was recorded $37 billion, seeing an increase of $1.9 billion in expenses of operation and $4.5 billion loss in profit.

2014 fiscal year for Apple (NASDAQ: AAPL) looks like a step towards improvement from 2013. The estimate by consensus is $38.78 billion. Looking deeper into the estimates, it seems as if the analysts believe that company doesn’t overcome its 2012 peak until the year 2016.

However, this does not mean that the investors need to wait till 2016 to see a silver lining. One of the reasons for this is that Apple (NASDAQ: AAPL) is considering reducing its share count. Now that the investors are waiting, the company will reduce its shares so that it can achieve $110 per share. Second reason is that the company could launch a new product, and interrupt the estimates by the analysts. In fact the company can jump over the estimates and achieve a new high.

The estimates are all on the sell-side. They are kind of conservative too. Apple (NASDAQ: AAPL) can easily cross the estimates with new products that it is planning to launch. These include a couple of models of iPhone 6, new models of iPad and a new iWatch.

The sales of these products will have a greater impact in 2015. However, the consensus prediction of $3 billion earnings in 2014 is conservative. If the company continues the buyback program, their stock would soon achieve $110.

Apple (NASDAQ: AAPL) had hired a new team for the development of its new products. The team was itself appointed secretly with the purpose of keeping the news of a new product away from public ears. As things would have it, the secret is now public. Some viewers believe that the iWatch would potentially outdo the iPhone, iPod and even the iPad. ABI Research have predicted that about 485 million of the new product will be sold in each year. The stock price of the company can increase without limit.

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