Why Apple Without Steve Jobs Is Still a Buy
Even after the visionary's passing, the stock is extraordinarily cheap for a company that has produced such dazzling results.

Editor's note: We first published this column on August 24, following Steve Jobs' resignation as Apple CEO. Jobs died on October 5 at age 56. We've updated the column with share prices and earnings estimates as of October 5. The company's stock has gone up 0.5% since the August 24 close, compared to a 2.8% decline for the S&P 500.We're about to find out how much Wall Street thinks Steve Jobs was worth to Apple (symbol AAPL).
Clearly, Jobs's role can't be overstated. But the technology sector is filled with brilliant innovators, and some of them, including new CEO Tim Cook, are probably high in Apple's executive ranks and among the company's legion of engineers and product designers. Even before Jobs resigned, we at Kiplinger's were bullish on Apple's prospects in a post-Jobs world.
Reacting to word of his death, Canaccord technology analyst Michael Walkley reiterated his buy rating on Apple and his $545 one-year price target for the stock. "While Mr. Jobs' passion, creativity, and keen eye for consumer preference will be missed, we believe Jobs and Apple's executive team have built an unparalleled talent base and corporate culture that sets the table for future success and innovation," Walkey wrote. "We believe Tim Cook is well qualified for his new role as CEO and has at his disposal a deep and talented executive team in the areas of supply chain management, hardware/software design and product marketing."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Apple’s stock is extraordinarily cheap for a company that has produced such dazzling results. At the October 5 close of $378.25, Apple shares sold for less than 12 times the average analyst earnings estimate of $32.74 for the fiscal year that ends September 2012. If you subtract the $76 billion, or $82 per share, of cash and long-term investments on the company’s balance sheet from the share price, Apple sells for just 9 times estimated earnings.
A valuation so modest seems to provide a lot of downside protection for a company that delivered earnings growth of 70% annualized over the past five years. The next five years certainly won’t be so lucrative, but they don’t have to be for the stock to produce good returns. (For the record, analysts on average see earnings growing at a rate of 22.7% annually over the next three to five years.)
My advice: At its current price, Apple shares remain attractive. Of course, you can't expect the stock to hold up when the overall market tanks, and there are enough concerns out there to suggest that the correction that started last April is not over. I suggest using market pullbacks to accumulate the stock at lower prices.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
April RMD? Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Last updated
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
Should You Sell Tesla Stock as Elon Unrest Grows?
Tesla's CEO is wearing many hats and is managing them "with great difficulty."
By David Dittman Published
-
5 of Warren Buffett's Best Investments
Warren Buffett has had plenty of wins throughout his decades of investing. Here, we highlight five of Buffett's best investments.
By Kyle Woodley Published
-
Apple's 100,000% Return Is a Result of Innovation, Brand Loyalty and Buybacks
Apple spends billions buying back its own shares, but this is just one catalyst behind the incredible growth in its share price.
By Louis Navellier Published
-
Stock Market Today: Stocks Struggle After Trump's EU Tariff Threats
Stocks pared early gains after Trump threatened the European Union with 25% tariffs.
By Karee Venema Published
-
Stock Market Today: Dow Gains After Nike Gets Upgraded
Jefferies thinks Nike's new CEO will spark a turnaround in the beaten-down blue chip.
By Karee Venema Published
-
Best Investments to Sidestep Trump's Trade War
These ETFs are well-designed to weather rising U.S. protectionism and retaliatory tariffs.
By Jeff Reeves Last updated
-
Stock Market Today: It's Mostly Onward and Upward for Equities
The major U.S. equity indexes were mixed Friday but closed an eventful week for earnings and data modestly higher.
By David Dittman Published
-
Stock Market Today: Stocks Pop on Time-Delayed Tariffs
All three major U.S. equity indexes rallied to intraday highs following President Trump's latest trade moves.
By David Dittman Published