Apple's Capital Return Plan 'The Most Significant Near-Term Catalyst,' Says Susquehanna

In a report published Tuesday, Susquehanna Financial Group analyst Chris Caso argued that the main catalyst for

April conference call will be the discussion around the company's capital return plans, not its new Watch product. Caso estimated that Apple will produce three to four million watch unit products in C1Q, which is higher than the two to three million previously estimated in mid-January. Production is expected to ramp in the June quarter to four to six million unit devices. In total for calendar 2015, the analyst is projecting 20 to 25 million units will be produced. However, Caso argued that Apple's capital return plans remains its "most significant near-term catalyst." The analyst added that if Apple continues to return in excess of 90 percent of free cash flow to investors (consistent with 2014), nearly $80 billion could be allocated to buybacks over the next two years (assuming over $110 billion in free cash flow and $22 billion in dividends), which will add about $1.20 in earnings per share over the next two years. Shares are ‘Positive' rated with a $145 price target.