Activist investor Carl Icahn, who owned 45 million shares of Apple as of last August, claims that the stock could be worth over $203 per share. At $203, a 71% premium over its closing price on Feb. 2, Apple would have a whopping market cap of $1.12 trillion . While that would be wonderful news for Apple investors, we should check the math and logic behind Icahn's grand claim.
The $200 question
I'm not saying that Apple stock will never be worth $200. However, the road to $200 will be a tough one which requires Apple's margins to keep expanding, top line growth to remain robust, and buybacks to continue.
Investors should focus on Apple's ability to grow revenue beyond the iPhone with new products like Apple Watch, and its ability to maintain its mix of high sales and high margins, instead of believing long-shot price targets from big investors who can move the market with open letters to companies and investors.
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Apple forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering Apple's brand-new gadgets. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, just click here !
The article This Billionaire Claims That Apple Inc. Stock Is Worth Over $200 originally appeared on Fool.com.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and International Business Machines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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