Apple rises as Evercore says premium valuation 'justified'
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Apple (NASDAQ:AAPL) shares rose more than 1.5% on Tuesday as investment firm Evercore said the tech giant's premium valuation is "justified" and could expand compared to the other big tech companies.
Analyst Amit Daryanani reiterated the firm's outperform rating on Apple (AAPL), along with the firm's $190 per-share price target, noting that even in a time of economic uncertainty, Apple's (AAPL) premium is deserved, due to the company's financial prowess, including return on invested capital, return on equity and "solid" free cash flow, along with disciplined stock-based compensation and no massive layoffs.
"We think Apple deserves a premium to this peer group given its higher ROIC (AAPL at 39% 5-year average vs. peer group at 21%)," Daryanani wrote in an investor note, referencing companies such as Amazon (AMZN), Meta Platforms (META), Google (GOOG) (GOOGL) and Microsoft (MSFT).
"We continue to think consumer staples and/or high-end luxury companies remain the relevant peer group for [Apple]," Daryanani added.
Earlier this month, Apple (AAPL) shareholders re-elected the tech giant's entire board of directors at its annual investor meeting, along with approving pay packages for CEO Tim Cook and other executives.