Carl Icahn believes that Apple’s (NASDAQ:AAPL) share worth is $200. He had two arguments regarding his statement. The first reason being that, Apple (NASDAQ:AAPL) is currently in a position that it has enough cash to buy back its shares hence pushing the price of its stock upwards. The second is that Apple (NASDAQ:AAPL) earnings are to increase by 30% in 2016 as well as 2017 as predicted by analysts.
He stated that Apple’s (NASDAQ:AAPL) stock price is to rise to $203 with a price-to-earnings-ratio of about 20. Icahn is highly exact in predicting the numbers for any company’s future. Apple (NASDAQ:AAPL) posted its quarterly revenue amounting to $42.1 billion with net profit for the quarter as $8.5 billion which makes it at $1.42 for every diluted share.
Last year Apple (NASDAQ:AAPL) had revenue amounting to $37.5 billion and a net profit amounting to $7.5 billion with an amount of $1.18 for every diluted share. Icahn argues that Apple (NASDAQ:AAPL) will go far and above the current rate. He argues that the iPhone 6 sales are bound to increase with the holiday season approaching. The company is going short on iPad sales though and if these were to increase then Icahn may even have his way.
Apple’s (NASDAQ:AAPL) iPhone 6 sales make up around 55% of the company’s total revenue. The company may have to launch other services as well in order to gain more revenue from the market. A good example of such service can be its ApplePay which is bound to be a hit by benefiting retailers and consumers. Another can be August.
Over the week, the company’s share prices soared especially on Monday with the International Trade Commission ban on imports. Another instance where these share prices rose was when the same commission approved one of the import bans against Samsung (KRX: 005930) models. Without further thought, Apple (NASDAQ:AAPL) will need to do well with its launch of the iPhone 7 and try and come up with a way to fix the decline of its iPads.
Maybe it’s time for the company to launch new products like Apple TV which is much needed for sure as the current state of television is stuck in a past era as reported by the CEO, Tim Cook in an interview. If the company decides to pursue this launch then it may require the partnerships of content providers before it can be released.
Icahn usually gets his way with things and his prediction might as well turn out to be true. With Apple (NASDAQ:AAPL), Icahn truly believes his prediction considering all the stock he has bought of Apple (NASDAQ:AAPL). The new earnings of the company state that it just might as well have an increase in its stock price soon. To go beyond it, it will have to work hard on improving its current products and start working on creating new ones even if it were to buy back its stock with all the cash it has.