Shareholders Side With Apple on Contentious Votes, Analyst Eyes $230 Per Share

Apple CEO Tim Cook at Apple event in 2022
Justin Sullivan / Getty Images

Apple (AAPL) won support for all of its voting proposals at its annual shareholders' meeting on Friday, despite some controversy and disagreements.

Key Takeaways

• Apple secures a 'clean sweep' on shareholder voting proposals, 

• The company’s CEO Tim Cook answered questions in a virtual annual shareholder meeting.

• Morgan Stanley analyst laid out drivers for a $4 trillion stock valuation.

The virtual meeting disappointed on new development updates and Apple’s stock dipped 0.88%, in line with the Nasdaq as markets fret over banks.

Shareholders Backed Company on All Proposals

The first four votes saw the current board of directors approved for re-election, alongside Ernst & Young being approved as the company’s accountant. Two votes on executive pay and frequency of "Say on Pay," were also given a green light.

The next two votes were more contentious, with shareholders seeking an annual audit of Apple in relation to a Civil Rights and Non-Discrimination Audit Proposal. However, Apple argued that there was no need for such an audit, given the current approach to pay and diversity. A majority of shareholders agreed.

Shareholders were also persuaded to vote against the proposal for an audit of Apple’s business and exposure in China. Apple persuaded stockholders that it already provides sufficient information in its voluntary reporting, as well as its filings with the U.S. Securities & Exchange Commission.

Finally, the company was able to dodge proposals that required greater board communication with shareholders and increased pay gap studies. Bloomberg said the voting on the proposals effectively gave Apple a “clean sweep.”

Morgan Stanley Highlights Path to $230

The shareholder meeting may have been light on the company’s plans, but Apple's stock price recently got upgrades by Goldman Sachs, which set a target of $199, and Wedbush Securities, which had a forecast of $190.

Morgan Stanley’s Eric Woodring, meanwhile, has a bull case scenario of $230 per share. That marks a significant upside from the current price near $150 and Woodring laid out five under-the-radar reasons why he believes the company will reach that valuation.

"If we look beyond the near-term, we see a catalyst-rich event path over the next 12 months that is
underappreciated by investors," Woodring wrote.

The analyst saw 10 to 30 million iPhones of pent-up demand coming in 2023, while he also said that a rebound in app store purchases, improved logistics, and easing foreign currency headwinds would boost margins. The imminent iPhone 15 and VR headset releases will be two positive drivers, according to Woodring, but he put extra weight on a potential subscription model.

"The potential launch of a hardware subscription service - rumored to launch as early as March/April 2023 - is the key catalyst that can not only help drive spend per user materially higher but also help shift the market's perspective on valuation," Morgan Stanley wrote.

The Bottom Line

While the iPhone and VR headset are highly anticipated, investors will likely have to wait until Apple's WWDC2023 developer show in June for any real information on upcoming products.

Article Sources
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  1. Apple Investors. "SEC Proxy Statement"

  2. Bloomberg. "Apple Investors ReElect Board, Reject Measures".

  3. MSN. "Apple Stock has 5 Under the Radar Drivers".

  4. MacWorld. "WWDC 2023: Everything We Know".

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