Apple is primed to resume growth after four straight quarters of declining sales
Worries over weak iPhone 15 demand and regulatory scrutiny should be tempered for Apple, the world’s most valuable stock, is about to start growing again.
In every quarter of the past fiscal year, Apple has reported a decline in sales. It is the company’s longest losing streak in decades. Add to that a dawdling approach to generative artificial intelligence and it makes sense that Apple’s share price growth should lag behind peers and draw downbeat analysis.
Such jitters meant that shares in the company on Tuesday fell nearly 4 per cent — a drop equal to more than $100bn in market value — following a downgrade from Barclays. Analysts pointed to weakness in iPhone 15 demand. Apple also faces an uncomfortable year of regulatory scrutiny that could threaten a lucrative search deal with Google worth more than $20bn per year.
Both worries should be tempered. Regulatory decisions are not imminent and there is a good chance growth will return in 2024.
But the real reason to think the stock can continue to trade at a forecast earnings multiple twice as high as the 10-year average is the balance sheet. At the last count Apple had $162bn in cash and marketable securities. If it spends the same proportion of this on dividends and buybacks as it did last year then investors can expect to receive a hefty $89bn in 2024.
MacDailyNews Take: Apple dividends may (finally) hit 25-cents, but the real boon for Apple shareholders are the buybacks which install a nice high floor for the stock. With those outlier quarters containing sales from the COVID lockdown nonsense now out of the picture, growth should once again be on the horizon.
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