Carl Icahn Values Apple At $1.3 Trillion, Wall Street Says ‘Not So Fast’
Billionaire investor and activist shareholder Carl Icahn didn't blink twice at Apple becoming the world's first $700 billion company. In fact, he thinks the Cupertino outfit is worth nearly twice as much. According to Icahn, Apple's stock should be trading at 20 times earnings per share -- with net cash of $22 per share, that comes to $216, well above the $126.45 price it's going for now. And at $216 per share, Apple would be worth a staggering $1.3 trillion.
"This is why we continue to own approximately 53 million shares worth $6.5 billion, and why we have not sold a single share," Icahn stated in a letter to his Twitter followers. He went on to add that if Apple introduces a TV next year or the year after, then the 20 times multiple becomes a conservative one.
In other words, Apple is undervalued at $700 billion, in Icahn's eyes. He's probably right, assuming investors don't freak out and start dumping stock. Though if they do, that could be better for Apple as well -- Icahn is currently urging the company to buy back more shares and raise its dividend.
Apple certainly has that option. As of December 27th, the company was sitting on a cash reserve of about $178 billion. But the question is, how much is Apple truly worth?
According to Reuters, Wall Street's thinking isn't in line with Icahn's. While Icahn thinks Apple should be trading at $216 today, analysts think that kind of valuation is a few years down the road, and that's if Apple CEO Tim Cook can continue to release game changing products.
That's not to say Apple won't one day be worth well over a trillion dollars, but for now, analysts on average have Apple's stock price being worth around $134, or about 6 percent higher than yesterday's closing price.
"This is why we continue to own approximately 53 million shares worth $6.5 billion, and why we have not sold a single share," Icahn stated in a letter to his Twitter followers. He went on to add that if Apple introduces a TV next year or the year after, then the 20 times multiple becomes a conservative one.
In other words, Apple is undervalued at $700 billion, in Icahn's eyes. He's probably right, assuming investors don't freak out and start dumping stock. Though if they do, that could be better for Apple as well -- Icahn is currently urging the company to buy back more shares and raise its dividend.
Apple certainly has that option. As of December 27th, the company was sitting on a cash reserve of about $178 billion. But the question is, how much is Apple truly worth?
According to Reuters, Wall Street's thinking isn't in line with Icahn's. While Icahn thinks Apple should be trading at $216 today, analysts think that kind of valuation is a few years down the road, and that's if Apple CEO Tim Cook can continue to release game changing products.
That's not to say Apple won't one day be worth well over a trillion dollars, but for now, analysts on average have Apple's stock price being worth around $134, or about 6 percent higher than yesterday's closing price.
