Investing.com — Needham & Firm analysts offered three key causes why traders ought to stay bullish on Apple (NASDAQ:) inventory regardless of considerations about its dependence on the iPhone.
The agency maintained a Purchase score on the inventory in a be aware Tuesday, with a goal worth of $260 per share, representing a 16% upside.
A Liquid Inventory Throughout Uncertainty: The analysts be aware that whereas opponents like Amazon (NASDAQ:), Google (NASDAQ:), Microsoft (NASDAQ:), and Meta (NASDAQ:) are closely investing in generative AI (GenAI) infrastructure with no fast income increase, Apple stands out as a secure and liquid inventory.
In a risky market, they argue that traders want a dependable inventory to “disguise in” throughout 2025, making Apple a lovely choice.
Share Repurchases Driving EPS Progress: Needham says Apple is actively lowering its fairness base by means of share buybacks, which is anticipated to drive earnings per share (EPS) progress.
The corporate’s $110 billion share repurchase authorization from Might 2024 is projected to result in 11% EPS progress in fiscal yr 2025 and 12% in 2026, in accordance with Needham estimates. This continued buyback technique is predicted to assist the bullish outlook for Apple.
Sturdy Money Place Allows Additional Buybacks: Needham believes Apple’s dedication to reaching “internet money zero” from its present internet money place of about $50 billion, together with $91 billion in money from operations reported within the first 9 months of fiscal yr 2024, suggests accelerated share repurchases within the close to future.
This monetary technique is predicted to additional improve shareholder returns.
Regardless of considerations about Apple’s reliance on the iPhone and its slower tempo of GenAI adoption in comparison with friends, Needham & Firm believes Apple’s monetary self-discipline and inventory buyback technique make it a sturdy funding alternative.