Apple (AAPL) stock is modestly lower Tuesday after the European Court of Justices ruled that the tech giant must pay 13 billion euros (about $14.4 billion) in back taxes to Ireland.
The ruling stems from a 2014 investigation by the European Commission into Apple's tax payments in Ireland, according to CNBC. This led to a 2016 ruling that Apple received "illegal" tax benefits from Ireland over the course of two decades. After a series of appeals, the ruling was confirmed, which ordered Ireland to recover the back taxes.
"This case has never been about how much tax we pay, but which government we are required to pay it to," an Apple spokesperson told CNBC. "We always pay all the taxes we owe wherever we operate and there has never been a special deal. The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the U.S."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
In a filing with the Securities and Exchange Commission (SEC), Apple said it expects to record a one-time income tax charge of up to approximately $10 billion in the fourth quarter of its current fiscal year as a result of the ruling.
Is Apple stock a buy, sell or hold?
Apple stock has slightly lagged the broad market so far this year, up 15.2% on a total return basis (price change plus dividends) vs the S&P 500's 15.8% gain. But Wall Street remains bullish on the Dow Jones stock and isn't too concerned about the company's big tax bill.
Indeed, according to S&P Global Market Intelligence, the average analyst target price for AAPL stock remains at $237.99, representing implied upside of over 9% from current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Wedbush is one of the most bullish outfits on the large-cap stock, which reiterated its Buy rating and $300 price target on Apple after Monday's iPhone 16 reveal.
"Today in Cupertino, Apple launched iPhone 16, which we believe will be the most successful iPhone unit launch in its history, as Apple Intelligence will be the launching pad for the consumer AI Revolution globally," says Wedbush analyst Daniel Ives said in a note yesterday following Apple's September launch event.
Ives adds that the "new era of personalization and how consumers interact with their iPhones has now begun," and he believes this will spark "a renaissance of iPhone growth (high-single-digit growth upside) for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025." AAPL's current market cap is closer to $3.33 trillion.
Related Content
-
Are COVID Shots Still Covered By Medicare?Getting the new COVID-19 vaccine covered by Medicare isn't as easy this year as it was in the past. Here's what you need to know before you take a trip to your pharmacy.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
How Digital Platforms Are Changing the Way You Invest in Gold
Investing in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
-
One Small Step for Your Money, One Giant Leap for RetirementSaving enough for retirement can sound as daunting as walking on the moon. But what would your future look like if you took one small step toward it this year?
-
This Is What You Really Need to Know About Medicare, From a Financial ExpertHealth care costs are a significant retirement expense, and Medicare offers essential but complex coverage that requires careful planning. Here's how to navigate Medicare's various parts, enrollment periods and income-based costs.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
