Apple Will Use Tax Cut Savings to Give Back $100 Billion to Shareholders

Tech giant Apple will be giving back a lot more to shareholders.

Citi Research has reiterated a “buy” rating on the stock citing that Apple will use tax reform proceeds in order to increase its stock buyback and dividend program.

Citi Research analyst Jim Suva wrote in a note, “We do expect volatility ahead as consensus estimates calibrate to lower March and June quarters given more tempered demand for iPhone X. Looking ahead, we expect investor focus to be on the impact from Apple’s capital returns strategy, which we estimate could be a $100 billion increase, the 2H18 lineup, and continued strength in Apple’s Services segment.”

According to Suva, Apple will raise its capital return program to around $400 billion on its next earnings call. Currently the company has a $300 billion authorization. The company will be reporting its Q2 financial results on May 1st.

“We believe that the shares remain attractively valued relative to the market and can undergo sustainable multiple expansion,” he also wrote.

Suva has a $200 price target on the stock.

Disclaimer: We have no position in Apple Inc. (NASDAQ: AAPL) and have not been compensated for this article.