Apple (NASDAQ:AAPL) could announce an incremental stock buyback of $80-90 billion this month, according to Citi analyst Jim Suva.
Apple spent roughly $81 billion in the last 12 months on buying back its shares, Juva adds. Furthermore, the Cupertino-based titan could also raise its dividend by 5-10%, Citi analyst said.
As far as fundamentals are concerned, Suva sees several positive drivers for Apple‘s products and services.
“While supply chain headwinds are likely to linger, we see demand driven by mix shift away from lower priced Android phones towards more mid end and premium pricing products. We note recent media news of production cuts is nothing unusual at this point in the product cycle given Apple tends to overshoot on build estimates to ensure sufficient supply,” the Citi analyst wrote in a client note.
News concerning regulatory risks could eventually act as a “major overhang” on Apple shares, however, the analyst says this is a headline risk rather than a fundamental risk.
Still, he recognizes that Apple stock could correct lower on such headlines but these pullbacks should be seen as buying opportunities.
The analyst also reflected on the recent media report that Apple is working on subscription offerings for its hardware products.
“Many technology companies are offering more as a service offerings rather than full purchase price. We believe at some point in the future Apple may do this with its Mac, iPads, Apple Watch, and other devices. This is not that dissimilar to the iPhone leasing program, but will make these other devices more affordable as they will not require the large upfront cash outlay,” Suva added.
Apple shares closed at $165.75 yesterday.
By Senad Karaahmetovic