News of Apple Chief Executive Steve Jobs' medical leave of absence pushed the firm's stock lower on Tuesday. But David Garrity, principal at GVA Research, said the news won’t stop the shares from trading higher than $400 over the next 12 months.
“Jobs is seen as being intertwined…and his presence has meant a great deal to investors and consumers at large,” Garrity told CNBC.
But Garrity said the company most likely won’t be affected by Jobs’ absence.
“We may also get some further announcements coming out of the company as to what they intend to do with $50 billion worth of cash. [Apple] could initiate a dividend and could have a buyback—and still be in a situation where they continue generating cash on the balance sheet this year.”
Garrity also noted that the firm remained largely intact during Jobs’ previous medical leaves in 2004 and 2009.
“The hallmarks we saw today in terms of how this announcement came out on a day the [US] market was closed show that the company is thinking very clearly about people having an opportunity to digest the information,” he said.
“And I think we may have some further announcements coming out which indicate that there’s going to be value provided to investors during the time that Jobs is gone from CEO on an active basis.”
Scorecard—What He Said:
- Garrity's Previous Appearance on CNBC (Jan. 11, 2011)
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CNBC Data Pages:
No immediate information was available for Garrity or his firm.