Skip to content
apple-investor

Apple Investor

Investing News and Strategies

Primary Menu
  • Analysts
  • Apple Products
  • News
  • Trading
  • Home
  • 2013
  • April
  • Steve Milunovich – Apple Way Too Cheap We Are Seeing Fizzle Before The Sizzle
  • News

Steve Milunovich – Apple Way Too Cheap We Are Seeing Fizzle Before The Sizzle

Frances Henderson April 19, 2013 2 min read
steve-milunovich-apple-way-too-cheap-we-are-seeing-fizzle-before-the-sizzle-2

Steven Milunovich, Analyst, UBS

Here’s an analyst that see’s it the way I do. I like the editors comment, the fizzle before the sizzle. Mr. Milunovich thinks Apple is too cheap. Whoa! This is where I part ways, but not because he thinks it’s too cheap, rather that he think investors care that Apple is too cheap or not. They care about one thing, whether it is going up or down a shitload. Watching all these analysts figuring their numbers, carrying the not not, double not, and most of them hardly ever agree. The variance is huge.

Jethro Bodine doin sum figerin

Steve is like Toni Sacconaghi in that he too believes Apple should take on debt in order to make payouts to shareholders more palatable. Interest is tax deductible I guess is the reasoning. I say the money is better spent on investments. That would also be tax deductible and you’d have something to show for it. Am I wrong?

UBS‘s Steve Milunovich this morning reiterates a Buy rating on Apple shares and a $560 price target, writing that the current slump is the “fizzle before the sizzle,” as he sees it, the sizzle in this case being the prospect for multiple new product introductions in the second half of the year, such as an “iPhone 5S” and a lower-cost iPhone.

But his real focus is the prospect for return of cash to shareholders, and Street estimates that he believes are still too high for last quarter and this quarter.

He’s modeling Q2 revenue of $42.16 billion and EPS of $9.66. For Q3, he expects the outlook to be disappointing. He’s modeling $38.4 billion and $8.63 per share.

Milunovich thinks the stock is too cheap if Apple makes a significant boost in shareholder payouts:

Apple might increase its three-year shareholder return commitment from $45bn to $65bn or more, possibly aided by the issuance of low cost debt. At current levels, $10bn in additional share repurchase or $20bn total over three years would be 5% accretive to our estimates and a $2-5bn dividend increase would lift the stock’s indicative yield from 2.5% to 3.0% or 45% above the Russell 1000. For now, our base case valuation and estimates do not factor a significant change in capital stewardship. We think such actions could quickly re-rate shares positively by 10-15%. Observing the option implied dividend stream, we think the market is underpricing the potential near-term boost in the dividend at only ~15% growth or $3.05 per share quarterly. Longer-dated options imply a more sizable dividend growth rate of ~35% in F2014 though still below our base case assumptions on a cumulative basis. Our more bullish expectations also factor a doubling of the current buyback authorization to $20bn, effectively reducing the cost of dividend growth through share accretion.
SOURCE

Continue Reading

Previous: Maynard Um – Reiterates Outperform On Apple
Next: Toni Sacconaghi – Apple Must Maintain Tablet Lead Through Volume And Cheaper Models

Related Stories

Only 38 Days to Apple’s WWDC15 only-38-days-to-apples-wwdc15-2
2 min read
  • News

Only 38 Days to Apple’s WWDC15

June 11, 2016
Apple Confirms October 16 It’s Been Way Too Long Event apple-confirms-october-16-its-been-way-too-long-event-2
1 min read
  • News

Apple Confirms October 16 It’s Been Way Too Long Event

June 11, 2016
Apple Takes the Lead in Supplier Responsibility, Accountability apple-takes-the-lead-in-supplier-responsibility-accountability-2
5 min read
  • News

Apple Takes the Lead in Supplier Responsibility, Accountability

June 11, 2016

Recent Posts

  • Alligator Indicator by Bill Williams
  • Best Stocks To Invest In
  • Blue Chip Stocks
  • How do I go about Investing My Money?
  • How to Evaluate Your Investments in 6 Easy Steps

News

Only 38 Days to Apple’s WWDC15 only-38-days-to-apples-wwdc15-2
2 min read
  • News

Only 38 Days to Apple’s WWDC15

Frances Henderson June 11, 2016
Apple’s World Wide Developer Conference starts on Monday June 8th and ends on the following Friday, June...
Read More
Apple Confirms October 16 It’s Been Way Too Long Event apple-confirms-october-16-its-been-way-too-long-event-2
1 min read
  • News

Apple Confirms October 16 It’s Been Way Too Long Event

Frances Henderson June 11, 2016
Apple confirmed yesterday that it would be hosting an event on Thursday October 16th. Sure, that much...
Read More
Apple Takes the Lead in Supplier Responsibility, Accountability apple-takes-the-lead-in-supplier-responsibility-accountability-2
5 min read
  • News

Apple Takes the Lead in Supplier Responsibility, Accountability

Frances Henderson June 11, 2016
It’s old news, yet Apple haters still argue with me, that Apple runs sweatshops in China, where...
Read More
Apple Volatility is on the Plate for 2015 apple-volatility-is-on-the-plate-for-2015-2
3 min read
  • News

Apple Volatility is on the Plate for 2015

Frances Henderson June 11, 2016
Happy New Year, and What a great year 2014 was for the Apple Auto Trader! This past...
Read More
How Did Apple’s Post Earnings Crash Affect You? how-did-apples-post-earnings-crash-affect-you-2
3 min read
  • News

How Did Apple’s Post Earnings Crash Affect You?

Frances Henderson June 11, 2016
[vc_row][vc_column width=”1/1″][vc_column_text]Be honest, I won’t tell. Did your brokerage account suffer a serious ding from that surprise...
Read More

You may have missed

Alligator Indicator by Bill Williams Alligator Indicator
7 min read
  • Apple Products
  • Trading

Alligator Indicator by Bill Williams

August 2, 2021
Best Stocks To Invest In stocks
4 min read
  • Investing
  • Trading

Best Stocks To Invest In

July 26, 2021
Blue Chip Stocks blue-chip-stocks
4 min read
  • Investing
  • Trading

Blue Chip Stocks

July 20, 2021
How do I go about Investing My Money? moneymoney
4 min read
  • Investing
  • Trading

How do I go about Investing My Money?

July 12, 2021
  • Terms of Use
  • Disclaimer
  • Strategy
  • FAQ
  • Privacy Policy
  • Testimonials
  • What You Get
Copyright © Apple-Investor. All rights reserved. | MoreNews by AF themes.