APPLE gets ready to increase its dividend and buyback program next month will might send the stock price within couple of months to $130.
APPLE might lift its buyback program to $50 billion from $40 billion and raise its dividend by 10% to 15%. APPLE will announce its capital allocation plans after second quarter fiscal results on April 19.
History shows, that buyback alone didn’t cause APPLE stock price to rise in the past.
During 2015, APPLE spent $110 billion on buybacks representing one-fifth of the total $569 billion buybacks companies listed in the S&P 500 made. APPLE stock declined 14.5% in the past 12 months underperformed the DOW Jones industrial average.
Despite that, analysts believe current APPLE price is undervalued and should be 23% more than it is now. IPhone 6 and a refresh of the IPad product cycle should contribute the most. The remaining 4-5% should come from more buybacks and changes in APPLE dividend plans.