Following the recent 7-to-1 stock split, the stock price of Apple Inc. (NASDAQ:AAPL), its stock price declined to around $93 per share, from around $650 price tag it had before. While the current investors of Apple are unaffected by the stock split, the stock has become more affordable for other retail investors. In a recent interview on CNBC, Timothy Arcuri, the Managing Director of Cowen and Company said that the stock split, combined with the launch of new products is a good thing for Apple’s stock and might send it higher.
Before the stock split, many analysts have raised the target price for Apple Inc. (NASDAQ:AAPL), some of them even raised it to the $700 mark. However, with the split, the company has taken this “mental ceiling” of investors’ tables, Mr. Arcuri stated.
“There is a lot to be interested in here. There is a lot to be excited about in the back half of the year. We talked about two major new products coming out, there is the iPhone 6 coming out, there is going to be a wearable product coming out. […] Multiple is still not even where it was if you strip out the cash, multiple still is not where it was when it [Apple] peaked the last time,” Mr. Arcuri added.
In this way, the managing director of Cowen and Company is certain that people should expect the launch of the two new products from Apple Inc. (NASDAQ:AAPL) later this fall, the iPhone 6 and the iWatch. The latter, in Mr. Arcuri’s opinion might add as much as $2 per share in terms of earnings, before the split.
Moreover, the wearable device will help to show Apple Inc. (NASDAQ:AAPL) as an innovative company, As Mr. Arcuri stated, Apple managed to amass a significant market share of the high-end Smatphone market, even without adding the larger display, which was done by its competitors.
Overall, Mr. Arcuri said that he still considers Apple Inc. (NASDAQ:AAPL) a ‘Buy’, even after the stock split and taking into account that Apple still has a lot of cash in the books, even after it spent $3 billion for the acquisition of Beats Electronics.
Watch the full interview below: