Apple shares fall on reports of high Irish tax bill

Apple (AAPL) fell slightly on Tuesday after the European Court of Justice ruled that the tech giant must pay Ireland 13 billion euros (about $14.4 billion) in back taxes.

The ruling stems from a 2014 European Commission investigation into Apple’s tax payments in Ireland, according to CNBC. That led to a 2016 ruling that Apple had received “illegal” tax benefits from Ireland over a two-decade period. After a series of appeals, the ruling was confirmed, ordering Ireland to recover the back taxes.

“This case has never been about how much tax we pay, but which government we owe it to,” an Apple spokesperson told CNBC. “We always pay all taxes we owe, regardless of where we do business, and there has never been a special agreement. The European Commission is trying to change the rules retroactively and ignore the fact that our income was already subject to tax in the U.S. under international tax law.”

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In a document filed with the Securities and Exchange Commission (SEC), Apple said it expects to incur a one-time income tax charge of approximately $10 billion in the fourth quarter of its current fiscal year as a result of the ruling.

Are Apple shares worth buying, selling or holding?

Apple shares have lagged the broader market somewhat this year, up 15.2% on a total return (price change plus dividends) basis, compared with the S&P 500’s 15.8% gain. Still, Wall Street remains bullish on the Dow Jones stock and isn’t overly concerned about the company’s large tax bill.

Indeed, according to S&P Global Market InformationThe average analyst price target for AAPL stock remains at $237.99, implying an implied upside of over 9% from current levels. Additionally, the consensus recommendation is Buy.

Financial services firm Wedbush has been one of the most bullish on large-cap stocks. Following Monday’s iPhone 16 reveal, the company reaffirmed a Buy rating and a $300 price target on Apple shares.

“Today in Cupertino, Apple unveiled the iPhone 16, which we believe will be the most successful iPhone launch in the company’s history, as Apple Intelligence will be the launching pad for the AI consumer revolution around the world,” Wedbush analyst Daniel Ives said in a note yesterday. Apple’s September Kickoff Event.

Ives adds that “a new era of personalization and consumer interaction with their iPhones has just begun,” and he believes this will usher in “an iPhone growth renaissance (high single-digit growth) for Apple over the next 12 to 18 months and drive the stock to $4 trillion in market cap by 2025.” AAPL’s current market cap is closer to $3.33 trillion.