The tech giant announced Wednesday that in the wake of corporate tax reform, it will make a $350 billion investment in the U.S. over next five years. To help fund part of that investment, Apple said it will repatriate about $245 billion in cash held overseas. Apple is also expected to use said cash to buyback stock and pay fatter dividends. The buybacks could serve up a major jolt to Apple's bottom line, says investment bank RBC Capital Markets.
"Assuming Apple does the buyback at an average price of $190, this could add an incremental $3.00 to $11 in estimated earnings," says Amit Daryanani, who is quick to point out that Wall Street is only estimating Apple's earnings this year at $11.61 a share.
The analyst reiterated an outperform rating on Apple with a $200 price target, or 11% above current levels.
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