Subject: Re: Apple from FT
For those Apple lovers. What's your expected EPS growth rate over the next 10 years?. (Assuming $6 2022 as a starting point)

It's possible their biggest (or near-biggest) source of growth in real earnings per share will be buybacks.
They could build out several huge businesses successfully, and it still wouldn't matter much percentage-wise considering the immense scale of what they're doing now.
The fact that the iPhone is the most profitable product in human history by a mile is a high class problem. But it's a problem.

Meaning the biggest single variable in how fast the EPS figure rises might well be how popular the shares are: what the future average valuation multiple is.

In early 2021 they were buying shares at a multiple of 40 on then-recent earnings.
That might well have been a good use of capital, but it's certainly a lot worse than the same dollars spent on the same business at a low multiple.

It's a strange multiplicative effect, hard to get your head around.
A firm with perpetually high multiples will not do so well with huge buybacks because it's a lowish return on that capital: it's a high multiple for a business with a headwind.
Conversely high buybacks for a firm with a forever-cheap share price works wonders--that mere fact makes them a much more attractive investment, worth a higher multiple.
So, other things being equal, a firm doing large ongoing buybacks as their main "expansion capex" is worth a high multiple if it has a low multiple, and vice versa.

Jim