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Jefferies Sees 'Tough' Two-Years for Apple (AAPL); Need for Cash 'Greater' than Expected

February 27, 2013 8:11 AM EST Send to a Friend
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Price: $100.57 +0.04%

Rating Summary:
    56 Buy, 9 Hold, 3 Sell

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    Up: 10 | Down: 9 | New: 0
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Into Apple's (Nasdaq: AAPL) annual meeting today, investors are hopeful of a boosted dividend or possible stock split (both of which are currently just rumors). However, maybe a longer-term outlook is more in order.

Jefferies' Peter Misek is taking such a view. Misek notes that CapEx requirements, slowing international sales, new subsidy models, and whitebox smartphones will create a "very rough" two-year period for Apple.

An accelerated dividend and buyback plan would give Apple strategic flexibility and enhanced shareholder value over the near- to intermediate-term time frame versus a preferred share strategy, Misek noted.

Misek explains that Apple's need for cash on hand might be "greater than some think" and that CapEx might double within the next two years.

Jefferies currently rates Apple at Hold with a $500 price target.

Ahead of the bell Wednesday, Apple is trading about 0.5 percent lower.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $448.97 yesterday.




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