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Two days after AAPL hits highest market cap ever, billionaire investor Carl Icahn values it at $1.3 trillion

Two days after Apple set a new record for the highest market capitalization of any company, valuing it at more than $700B, billionaire investor Carl Icahn has suggested the true value of the company is close to double this, at $1.3T.

Icahn, who is one of the company’s ten biggest shareholders with stock worth around $6.5B, says that a realistic valuation of the company would be 20 times its earnings per share. Factoring in Apple’s cash reserves of $178B, that would give a share price of $216–for a total company value of $1.3T.

Icahn notes that while he has previously been criticized for over-optimistic valuations of AAPL, 31 analysts have “dramatically increased” their earnings-per-share estimates in the past fortnight.

We have gained further confidence in our thesis, increasing the forecasted EPS for FY 2015 in our model from $9.60 to $9.70, and now believe the market should value Apple at $216 per share.  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 has consistently urged Apple’s board to increase the pace of its stock buyback program, his last call coming at a time when the shares were trading at $100. At the time of writing, shares were trading at $124.88. Apple recently set another world record, announcing the highest ever quarterly profit of any company.

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Comments

  1. 89p13 - 9 years ago

    I can only hope that he is right – and this is not the “Kiss of Death” for the dramatic stock increase!

    I would feel better if the investor with this much stock was Warren Buffet and not Carl Icahn.

  2. luckydcxx - 9 years ago

    I think Carl knows what he is doing. The only problem is that everyone needs to sell before he does.

  3. jrox16 - 9 years ago

    This is a great article about how Apple has essentially defied all the “experts” on how the tech world works and how Apple isn’t doing it right, etc….

    http://qz.com/340899/apple-earnings-iphone-business-theories/

  4. I’m an Apple investor but Icahn is over optimistic in my opinion. Apple has traded with a 20 P/E in forever and I don’t think it will this year (if it hasn’t by now what is the catalyst? We know the watch, Apple Pay, 6s, 6s+, etc… the are already factored in).

    If Apple can get some how get to 16 dollars a share in earnings then it might work but I think that is out of the real of possibilities without some kind of a new must have gadget that transforms the planet (I don’t think a Watch or a TV is it).

    I hope I’m wrong but this sounds like smoke blowing from Carl before he starts to trim his stake.

  5. iphonery - 9 years ago

    I’ve always considered Apple stock to be long term. Unlike other tech company stock where they start and just want to be bought out.

  6. KevinQ (@ksuyen) - 9 years ago

    Apple stock is long term, as another posted mentioned here. There’s no point to speculate with the standard factors (i.e. P/E, etc.) when it comes to Apple.

  7. Chad (@cdavis045) - 9 years ago

    how are they going to get all that cash into the US to pay for those buy backs? with most expansion occurring outside the US a lot of that cash isn’t going to be able to be repatriated unless there is new tax law passed

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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