Analyst Ups Apple Price Target for Second Time in Two Weeks

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Apple (NASDAQ:AAPL) continues to reap the benefits of its better-than-expected March quarter earnings report, strong international sales, and expanded share buyback program. In a research note issued to investors on Monday, RBC Capital Markets analyst Amit Daryanani boosted his price target on Apple shares for the second time in as many weeks, reports AppleInsider.

In the most recent research note obtained by AppleInsider, Daryanani raised his price target on Apple shares to $645 from $625. After Apple announced its fiscal 2014 second-quarter earnings on April 23, Daryanani raised his price target on the company’s shares to $625 from $590. Daryanani cited Apple’s recently announced expansion to its share buyback program as one of the primary reasons behind his price target revision.

Alongside its quarterly earnings report, Apple said it was expanding its share buyback program to $90 billion from the previously revealed $60 billion level. “We are announcing a significant increase to our capital return program,” said Apple CEO Tim Cook in a company press release. “We’re confident in Apple’s future and see tremendous value in Apple’s stock, so we’re continuing to allocate the majority of our program to share repurchases. We’re also happy to be increasing our dividend for the second time in less than two years.”

Daryanani anticipates that Apple will repurchase $44 billion in shares through December 2015, or about $6 billion worth of shares per quarter, according to AppleInsider. The size of the expanded buyback program also implied that Apple will buy a further 50 million shares at an average price of $590 per share.

According to Apple Vice President of Finance and Corporate Controller Luca Maestri, the stock buyback expansion will be funded by another bond sale. “We plan to be active in both the domestic and international bond markets during 2014 for an amount of term debt financing similar to what we issued in 2013, with a breakdown between markets, currencies, and tenures to be determined over the course of the year, and subject to prevailing conditions in each market,” said Maestri, according to an earnings call transcript provided by Morningstar.

Besides raising his price target on Apple shares once again, Daryanani also boosted his earnings per share estimate to $48.96 for fiscal year 2015, an increase of more than a dollar. The RBC Capital Markets analyst also maintained an “Outperform” rating on Apple shares.

According to the research note seen by AppleInsider, Daryanani cited multiple upcoming catalysts that could further boost the Cupertino, California-based company’s stock, including the annual Worldwide Developers Conference that kicks off in San Francisco next month, the expected launch of the so-called iPhone 6 in September, and a fourth-quarter iPad product line refresh. Last week, Apple’s share price achieved a one-year high of $599.43.

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