Apple hits record high as RBC upgrade says stock can climb 11% from current levels

• RBC Capital Markets upgraded its Apple price target to $390 from $345 on Wednesday, an 11% jump from where shares currently trade.
• Apple shares rose nearly 1% to a fresh all-time high of $355.37 on Tuesday.
• On Tuesday, Citi also upgraded shares of Apple to a Wall Street-high of $400.
• RBC's new price target comes after the firm did a deeper dive on Apple's share repurchase program.
• Watch Apple trade live on Markets Insider.
• Read more on Business Insider.

Shares of Apple rose nearly 1% Wednesday, hitting a fresh all-time high of $355.37 in intraday trading.

The move higher may have been driven by a group of recently boosted price targets for the Cupertino, California-based company. On Tuesday, Citigroup upped its price target to $400, a Wall Street high for Apple.

RBC Capital Markets followed suit Wednesday, raising its price target on shares of Apple to $390 from $345, signaling that the stock could gain another 11% from current levels. The firm also reiterated its "outperform" rating on shares.

RBC's new price target comes after the firm did a deeper dive on Apple's share repurchase program, which has a pace of about $70 billion annually.

"AAPL remains in a league of its own when it comes to share repurchases," wrote RBC analyst Robert Muller in the Wednesday note. "While AAPL's significant capital return program is well known by the market, we do not believe the market is giving enough credit for the financial impact."

Because of its rapid clip of share repurchases, Apple can still grow earnings per share at an annual rate of about 3.5% in the next five years, according to RBC's estimates. This implies that the "potential uplift from the upcoming 5G upgrade cycle is being discounted by the market," Muller wrote.

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In addition, RBC estimated that Apple has the runway to maintain its current buyback activity through mid-2023 with no organic growth, and could at that point repurchase shares at a rate of $5 billion annually without affecting its net cash position.

To arrive at its updated price target, RBC increased its target multiple for Apple to 24x from 21x applied to its calendar-year 2021 earnings estimate.

"With the macro backdrop slowly improving following the initial COVID-19 pullback, and as the economy has begun to reopen, we believe we are justified in utilizing a multiple more in line with its high-tech peers," said Muller.

He added that the multiple still lags the median 29x of the "FAANGM" peer group, which includes Facebook, Apple, Amazon, Netflix, Google, and Microsoft.

Apple has gained roughly 21% year-to-date.