Apple: The Ultimate Capital Return Play (Rating Upgrade)

Summary

• Apple's valuation corrected to the downside lately due to trade war concerns and smartphone market saturation, but its free cash flow and stock buybacks remain strong investment points.
• I previously rated Apple stock a hold due to moderating top line growth, but its aggressive stock buybacks are noteworthy, especially at a lower valuation.
• Apple is a leader in stock buybacks, with $95.0B worth of shares repurchased in FY 2024, supported by its massive free cash flow.
• Shares now trade at a 26X P/E, still above the big tech average, but Apple is likely going to announce a new buyback program this year.
• Despite risks of stalled iPhone growth, Apple's brand loyalty and potential new stock buyback plans make it decent value at current valuations.

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Apple (NASDAQ:AAPL) has seen an almost 20% decline in its valuation in the last several weeks, due to investor concerns about the potential for a prolonged trade war between the U.S. and other countries. Apple is also

Analyst’s Disclosure:I/we have a beneficial long position in the shares of GOOG, AAPL, AMZN, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.