Morgan Stanley raises Apple’s stock price target to $ 200
Apple CEO Tim Cook greets customers at the new Apple Store on Broadway in downtown Los Angeles, California, June 24, 2021.
Lucy Nicholson | Reuters
In a note to investors on Tuesday, Morgan Stanley’s Katy Huberty raised Apple’s price target from $ 164 to $ 200 and maintained a similar purchase rating, claiming that new products from Apple, such as an augmented reality headset or self-driving car, are not. still baked into the stock price.
Shares of Apple rose 2.7% on Tuesday morning, reaching a new record high.
Huberty also increased its forecast for iPhone shipping in the December quarter by 3 million units to 83 million units, an increase of 4% from year to year, and said that Apple has not met the same supply restrictions as they met in the September quarter. It said that the App Store revenue is also set to exceed the original forecasts.
“Today we know that Apple is working on products to address two significantly larger markets ̵[ads1]1; AR / VR and autonomous vehicles – and as we approach these products becoming a reality, we believe the valuation must reflect the potential for these future opportunities. “, said Huberty in the note.
The memo argues that Apple’s share price has risen by almost 500% over the past five years, mainly driven by new products and services, and not from iPhone revenue, which has grown 40% over the same period. Meanwhile, Apple’s service business has grown to nearly $ 70 billion annually, and the wearables and accessories business contributes $ 38 billion annually, Huberty said.
Huberty said that about 6% of Apple’s total revenue over the past five years has been generated by new products such as AirPods, Apple Watch and some of Apple’s services, which did not exist five years ago. She said that new products such as an AR headset, which could contribute as much to sales as the iPad did in the first four years on the market, could provide similar growth over the next five years, equivalent to an increase of around $ 20 per share in Apple’s share price today, on top of Morgan Stanley’s existing growth forecasts.
Meanwhile, an unconfirmed report from Taiwanese trade publication DigiTimes on Monday said that Apple plans to increase iPhone production by 30% in the first half of 2022. Shares of Apple suppliers such as Qualcomm and Micron saw an increase on Tuesday morning as well. This contradicts a report last week from Bloomberg which said that Apple warned that iPhone demand weakened towards the holidays this year.
