Europe’s highest court’s verdict against Apple ‘is not material’, says Citi By Investing.com

Europe’s highest court ended a decade-long legal battle by ruling that Apple Inc (NASDAQ: ) must pay 13 billion euros ($14.4 billion) in back taxes to Ireland.

The tax, estimated at about $10 billion, will substantially increase Apple’s effective tax rate for the quarter.

According to the company’s 8-K filing, this could result in a roughly 10% impact on its fiscal 2024 earnings per share.

“Apple generated roughly $100 billion in free cash flow in fiscal 2023, and we view the news as immaterial to our thesis,” Citi analyst Atif Malik said in a note.

The company has already placed €12.7 billion, including interest, in an escrow account until September 2023. These funds have been set aside and restricted from general use until a final decision is made in the tax case.

“This has been a long, drawn-out case and the final impact, while not ideal, does not affect our fundamental valuation of Apple,” added Amit Daryanani.

Apple shares were down 0.5% during the session on Tuesday in New York.