Apple Inc shares will surge to US$240, Carl Icahn says in call for bigger buyback

Activist investor Carl Icahn, left, and Apple Inc. CEO Tim Cook.

Apple Inc., which already announced it had been boosting its capital-return program by US$70 billion, should increase its stock buyback, Carl Icahn wrote in a letter to the company.

The market continues to misunderstand the producer of iPhones and iPads and the company\’s shares count US$240, 86 per cent above where they closed Friday, the billionaire activist investor said. That would give Apple an industry value of US$1.4 trillion.

\”With Apple\’s shares trading for just US$128.77 per share versus our valuation of US$240 per share, this is the time for a much larger buyback,\” Icahn wrote Monday within an open letter to Apple Chief Executive Officer Tim Cook.

Apple\’s shares rose 1.1 per cent to US$130.22 at 11:49 a.m. Ny time.

Icahn\’s renewed enthusiasm may come as the market debates whether Apple has enough innovation available to keep driving sales growth. Since April 27, once the company reported that second-quarter profit rose 33 per cent, shares had dropped 2.9 per cent at the close of trading last week.