Apple (AAPL) Upcoming Capital Return Plan to Add 5% to EPS Growth - Piper Jaffray

Piper Jaffray analyst Gene Munster expects Apple (NASDAQ: AAPL) upcoming Capital Return decision to add 5% to EPS growth.

Munster notes Apple will update investors on its annual capital return program review when it reports the Mar-16 quarter in April.

"We believe that prior changes in capital return policy are good indicators for what to expect this April. Specifically, we believe Apple will increase its dividend by 5-10%," Munster said.

The analyst said this level of dividend increase would be in-line with the 8% and 11% raises over the last two years.

"We expect Apple to add $30-50 billion to its share repurchase program based on the past two years of share repurchase program," he said. "This would generate an incremental 5% EPS growth excluding revenue in each of the next two years.. It seems the company targets exiting its capital return update with around $50-60 billion in available repurchase between the amount remaining on the prior authorization plus the amount of the new authorization."

The analyst reiterated an Overweight and price target of $172 and said the stock remains a top pick for 2016.

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 $101.50 yesterday.

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