Melius highlights FCF while reiterating buy on Apple

Measuring valuation in an era of AI.

“Given Apple’s free cash flow and we are about to embark on one of its most lucrative product rollouts since the big screen iPhones in 2014 – there is a case for Apple’s stock regaining some ground,” Melius analysts wrote in a note to clients.

Lately, Apple has announced the iPhone 17e and a refreshed iPad Air, a new MacBook Air, a MacBook Pro, new Studio Displays, the MacBook Neo, and an updated version of its over-the-ear headphones, the AirPods Max 2.

Apple shares were modestly higher in premarket trading but have lost some 8% year-to-date. Over the past 12 months, shares have gained 12%.

Source: Seeking Alpha

NB: Free cash flow (FCF) is the amount by which a business’s operating cash flow exceeds its working capital needs and expenditures on fixed assets (known as capital expenditures). It is that portion of cash flow that can be extracted from a company and distributed to creditors and securities holders without causing issues in its operations. As such, it is an indicator of a company’s financial flexibility and is of interest to holders of the company’s equity, debt, preferred stock and convertible securities, as well as potential lenders and investors. It has come recently into vogue when the bill for AI infrastructures has come due…

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