In a note to clients,, RBC Capital Markets says Apple could reach a “trillion dollar market-cap scenario” thanks to President Trump’s tax plan.
RBC estimates that the plan, which includes a corporate tax rate cut from 35% to 20%, could provide Apple with a $4 to $4.50 earnings-per-share windfall to go before approval but RBC outlines key areas that could benefit Apple including tax deduction caps for interest expenses, tax rates on foreign profits, and a lowered repatriation tax.
The plan would cut the corporate tax rate from 35% to 20% and lower repatriation tax rates for the accumulated foreign earnings of U.S. companies. Bank of America Merrill Lynch analyst Wamsi Mohan estimates the lower corporate taxes to benefit Apple’s earnings per share by $0.77 in fiscal year 2018 and $0.89 in fiscal year 2019. The analyst says Apple has $223B in “unrestricted” cash overseas and could repatriate at a tax rate of 8.75%.