Market Overview

Apple Analyst: 'Borrow & Squander Is Not A Strategy'


In a report published Thursday, analyst Trip Chowdhry of Global Equity Research mentioned that Apple Inc. (NASDAQ: AAPL)'s new CFO, Luca Maestri, appears to be following a "Borrow and Squander" strategy, taking the company's debt from $0 to $35 billion.

Apple is now using this borrowed $35 billion to undertake buybacks and pay dividends, which has not had any effect on the stock valuation. Maestri replaced Peter Oppenheimer, whom Apple "unceremoniously replaced," the analyst said. Oppenheimer is now on the Board of Directors at Goldman Sachs Group, Inc. (NYSE: GS). Goldman Sachs manages Apple's debt offerings.

"Under CFO Fred Anderson, Apple's EV/Operating Income multiples were in high 20s and Apple accumulated a vast Cash position," the analyst said, while adding that the current CFO "has turned the Balance Sheet upside down. He has no Cash in the US and is borrowing the Cash and squandering it to appease the short-term investors compromising the interests of long-term investors and the future viability of Apple."

Shares of Apple closed Wednesday at $128.64, down 1.47 percent.

Latest Ratings for AAPL

Nov 2020Loop CapitalUpgradesHoldBuy
Oct 2020Raymond JamesMaintainsOutperform
Oct 2020Piper SandlerMaintainsOverweight

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