Apple Must Expand Its P/E Multiple, Analyst Says
Global Equities Research's Trip Chowdhry mentioned that Apple Inc (NASDAQ: AAPL) shareholders are seeking answers to some critical questions, including the Board's attempts to raise the company's current depressed PE multiple. Investors are also keen to know the specific options the Board has considered to replace non-performing officials.
Analyst Trip Chowdhry noted that Apple's "borrow and squander" policy under CEO Tim Cook and CFO Luca Maestri has been a completed disaster. The company has spent $110 billion on share repurchases, given $43 billion in dividends and its debt has surged to $63 billion.
"Apple P/E multiples have contracted to a depressed level of 10.2x, while S&P500 is trading at P/E multiple of 21.33x," Chowdhry mentioned, while adding that potential shareholder value lost due to depressed P/E multiple is estimated at $480 billion.
Investors are now looking for some concrete action to change the scenario. Chowdhry stated that Apple's Board should appoint a visionary and passionate new CEO like Jon Rubinstein, father of iPod and iMac; while appointing Fred Anderson as CFO.
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