Apple’s Takeover Targets: Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX)
$AAPL, $NFLX, $DIS, $TSLA
Friday, Citigroup listed 7 companies as potential takeover targets for Apple Inc.(NASDAQ:AAPL), including Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIA) and Tesla Inc.(NASDAQ:TSLA), as a way to put its cash hoard of more than $250-B cash pile to work.
With over 90% of its cash sitting overseas, a 1-time 10% repatriation tax would give Apple $220-B for acquisitions or buybacks, a Citigroup analyst said in a note to clients.
US President Donald Trump’s tax reform plan proposes allowing multinationals to bring in overseas profits at a tax rate of 10% Vs 35% now.
“Since one of the new administration’s top priorities is to allow U.S. companies to repatriate overseas cash at a lower tax rate, Apple may have a more acute need to put this cash to use,” he said.
The analyst is rated 3 out of 5 Stars for his recommendations on Apple, according to Thomson Reuters StarMine.
The other potential acquisition targets include video game developers Activision Blizzard, Electronic Arts and Take Two Interactive Software as well as video streaming service Hulu.
The analyst said the targets were screened considering 5 criteria, as follows:
- strategic fit
- global scale
- transaction size
- few non-strategic assets and
- likely impact on Apple’s share price.
Under pressure from shareholders to hand over more of its cash hoard, Apple recently boosted its capital return program by $50-B, increased its share buyback program by $35-B and raised its Quarterly dividend by 10.5%.
|NASDAQ:AAPL||148.56||5 May 2017||2.03||146.76||148.91||146.76||21,561,700|
|HeffX-LTN Analysis for AAPL:||Overall||Short||Intermediate||Long|
|Bullish (0.30)||Neutral (0.21)||Bullish (0.27)||Bullish (0.42)|
Have a terrific weekend.