Apple Inc. (NASDAQ:AAPL) impressive run in the market is not going to stop any time soon according to Barron’s, which reports that the stock could return up to 25% this year with earnings expected to grow by 32% to $8.53 a share. In a span of a year, the stock has soared from $76 a share to the current record highs of $129 a share buoyed by strong iPhone sales.
A big dividend hike could be in the offing at the back of 25% growth in earnings, which could see Apple Inc. (NASDAQ:AAPL) trading at record highs of $160 a share. The dividend hike according to Barron’s could come as early as April when the company is expected to update its capital- return program as its current yield looks undersized at 1.5%.
Apple Inc. (NASDAQ:AAPL) stock valuation is at its all-time high as the company sits on cash and investments worth $30 a share up from $18 a share over three years ago. Apple outshines other giant tech companies on its expected $8.53 a share earnings calculated under generally accepted accounting practices unlike Facebook Inc (NASDAQ:FB)’s 96 cents a share and adjusted earnings of $1.96 a share.
Apple Inc. (NASDAQ:AAPL) enjoys a negative cash conversion cycle that allows it to collect more money from customers faster than it pays the suppliers. Wall Street now remains bullish of Apple’s free cash flow toppling highs of $10.17 a share this year, which should be 19% more than its current earnings.
The biggest question at the moment is whether Apple Inc. (NASDAQ:AAPL) will be able to sustain its impressive growth on the runaway success of iPhone 6 having seen its market share in the smartphone space soar to 20%. The company also generates more than 90% share in smartphone profits attributed to its high-end smartphones whose prices are more than double the industry average.
The fact that only 15% of iPhone users have upgraded to iPhone 6 could suggest that Apple could ramp in more sales heading into a full year of sales. The launch of Apple Inc. (NASDAQ:AAPL) Watch is also expected to add up to 10% of revenue in 2016. Piper Jaffray analyst, Gene Munster, expects Apple Pay to be a hit should Apple Watch succeed in terms of sales on unveiling. Suggestions of an Apple Television, as well as a possible Apple car, are expected to drive estimates and earnings even higher.
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