- Bank of America Merrill Lynch (NYSE:BAC) reiterates its Buy rating and $180 price target for Apple (NASDAQ:AAPL) on the belief that President Trump’s tax reform plan will benefit the tech giant.
- The plan would cut the corporate tax rate from 35% to 20% and lower repatriation tax rates for the accumulated foreign earnings of U.S. companies.
- BofAML analyst Wamsi Mohan notes that “existing deferred tax liability on the balance sheet could allow for substantially all of Apple’s foreign cash to be repatriated” and investors will give that cash a higher multiple.
- Mohan estimates the lower corporate taxes to benefit Apple’s EPS by $0.77 in FY18 and $0.89 in FY19.
- The analyst says Apple has $223B in “unrestricted” cash overseas and could repatriate at a tax rate of 8.75%.
- Apple shares are up 0.38% premarket.
- Now read: Apple: Project Titan Refocused
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BofAML: Apple could benefit from Trump tax plan
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