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Carl Icahn: Why An Apple Share Should Be Worth $216
Aspire, Thought Leaders | 24 February 2015
By: Vance Wong
Articles (74) Profile

Apple’s stocks are at its record-high value of about $129 per share. Despite this, billionaire activist and investor Carl Icahn thinks that it is still underpriced. Icahn believes that Apple’s shares should be worth $216 each (giving Apple a market capitalisation of $1.3 trillion).

The figure appears to be on a high side due primarily to the latest quarterly iPhone sales figures released by Apple. Furthermore, he believes Apple’s shares will continue to appreciate in the coming years.

The Apple iVan?

Following its iPhone sales success in December 2014, the tech giant has a new project involving what seems to be an electric minivan. This might seem far-fetched for Apple but they had recently developed CarPlay, a platform that integrates the iOS into cars. Ferrari was their first partner among others in line like Daimler, Volvo and Volkswagen.

On top of that, it seems like Apple has been hiring experts in the automotive building industry and even attracting some of Tesla’s top engineers. Analysts believe that this further strengthens Apple’s effort in creating a “stronger ecosystem”. There is no wonder Icahn strongly believes in the potential of the Cupertino-based organization.

Wall Street Agrees, Mostly.

In addition, Wall Street analysts does not doubt Carl Icahn’s insight that Apple will hit the $1 trillion value mark from its current $700 billion, but it will take a few years. Apple’s valuation would most probably increase in view of future projects that will create a “iLifestyle” for consumers across various platforms.

In contrast, Kim Caughey Forrest from Fort Pitt Capital thinks that Apple’s valuation is reaching its peak. She points out that the confidence investors have in Apple is the reason of its high market value.

It is overly optimistic to think the smartphone success will persist and depending solely on it is worse. Moreover, Forrest feels that the upcoming Apple Watch would “drive consumers largely away from watches.”

Evidently though, Apple’s stocks are very attractive now and it does not seem to be correcting any time soon in view of their upcoming iWatch. Looking at the two contrasting viewpoints from Icahn and Forrest, it seems like Apple’s share prices would not drop at least until the iWatch release. Whether the tech giant’s valuation will continue to increase will depend largely on consumers’ reception of the iWatch.

With a Communications background, Vance has the passion to write with a purpose - to provide content supported with substantial evidence to vested readers.

Please click here for more information about this author.

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