Apple's valuation is higher than that of the CAC 40

  •   07/08/2020 - 11h18
  •   HARMANT Adeline

A few days ago, Apple managed to become the first market capitalization in the world by passing the oil company Saudi Aramco and its valuation now exceeds that of the CAC 40. Explanations about this news.

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Apple's valuation is higher than that of the CAC 40
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A new historical market record for Apple:

Following the release of better than expected quarterly results, Apple managed to break new historical records at the end of last week. Friday's session ended with a 10.47% increase for the title, which continued to gain points early in the new week. The group's capitalization now reaches $1,886 billion, an increase of $172 billion in just one session on Friday.

Over the same period, the companies making up the French CAC 40 index had a total market capitalisation of EUR 1,506 billion, or USD 1,775 billion. We can therefore see that the American firm alone is now worth more than the 40 best French companies combined.

 

Rising earnings in declining markets :

Apple's second quarter 2020 results were up and above expectations while most other stocks were still suffering the effects of the pandemic. The group thus reports 11% year-on-year revenue growth in the third quarter of its lagged fiscal year at $59.7 billion, compared with a forecast of $52.3 billion.

Although it suffered from the pandemic at the beginning of the year, the group subsequently benefited from containment measures in all its business sectors and in most of the geographic markets in which it is present. For example, IPhone sales have earned $26 billion, $4 billion more than forecast, particularly following the introduction of the entry-level iPhone SE model in April.

 

Smaller investors will find it easier to buy Apple securities :

The group took advantage of the publication of these results to announce that it would simplify the purchase of its shares for retail investors. To do so, it will split its share again by multiplying the number of shares to divide the unit value by the same amount. This means that current shareholders will have more shares in their possession even though the value of their portfolio will remain the same.

From August 24, 2020, shareholders will receive three additional shares for each share held, which should bring the value of a share to just over $100. This operation has already taken place in 2014 with a 7-for-1 stock split, but also in 1987, 2000 and 2005.

In addition, analysts specialising in this sector estimate that Apple's valuation could reach $2,000 billion before the end of the year. However, Apple has not communicated its quarterly forecasts because of the current economic situation, which leaves some uncertainties.