Analyst Makes Case for Near $1000 Target on Apple (AAPL)
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Price: $325.30 +0.05%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 9 | New: 31
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 9 | New: 31
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Shares of Apple (Nasdaq: AAPL) are looking strong early Wednesday morning following a price target boost at Morgan Stanley from $515 to $720. But that's not all...
The analyst is also raising the "bull case" target to $960, indicating 69 percent upside from where shares currently trade. Morgan Stanley thinks the Street and investors are still underestimating Apple's earnings potential. There are several drivers to upside in the new Morgan Stanley bull case, including: "1) enterprise tablet adoption combined with demand upside from lower priced iPad; 2) strong upgrade cycle to LTE (Long Term Evolution) capable iPhone starting later this year; 3) emerging market iPhone (plus iPad, Mac) growth driven by new carriers. China Mobile alone could add more incremental iPhone shipments than the Street models in total for CY13; 4) margin upside from lower ASP declines, increased mix of mobile devices and recent capital investments."
On tablets, Morgan Stanley said about 56 percent of U.S. companies have purchased a device for corporate use. Should Apple be able to maintain its 80 percent tablet market share, that's an additional 9 million iPad units with $5 billion in iPad revs for calendar 2012.
Current views also don't assume an LTE-enabled iPhone, which Morgan Stanley expects to launch in the second half of 2012. Morgan Stanley mulls whether the iPhone 5 (or 'the new iPhone") may have "a higher-resolution and potentially thinner screen, new casing material, faster processor, and quad-mode baseband chip that works on multiple flavors of 3G and LTE." Ahead of the iPhone 4S launch, Morgan Stanley conducted a survey showing 62 percent of iPhone owners planned to upgrade. Assuming a similar situation for the new iPhone, that amounts to 148 million for its base model and 160 million for the bull case.
Both China and Brazil -- two huge emerging markets -- are relatively untapped by Apple. The countries, with user bases possibly at or north of 100 million smartphone users (or will be soon), haven't seen too much Apple action.
For calendar 2013, Morgan Stanley sees earnings of $80 per share. The firm also pointed to analysts not including a new TV and lower-priced iPhone, iPhone adoption excluding China which only assumes an average upgrade rate, and no multiple expansion.
Apple shares are up about 1.1 percent early Wednesday.
The analyst is also raising the "bull case" target to $960, indicating 69 percent upside from where shares currently trade. Morgan Stanley thinks the Street and investors are still underestimating Apple's earnings potential. There are several drivers to upside in the new Morgan Stanley bull case, including: "1) enterprise tablet adoption combined with demand upside from lower priced iPad; 2) strong upgrade cycle to LTE (Long Term Evolution) capable iPhone starting later this year; 3) emerging market iPhone (plus iPad, Mac) growth driven by new carriers. China Mobile alone could add more incremental iPhone shipments than the Street models in total for CY13; 4) margin upside from lower ASP declines, increased mix of mobile devices and recent capital investments."
On tablets, Morgan Stanley said about 56 percent of U.S. companies have purchased a device for corporate use. Should Apple be able to maintain its 80 percent tablet market share, that's an additional 9 million iPad units with $5 billion in iPad revs for calendar 2012.
Current views also don't assume an LTE-enabled iPhone, which Morgan Stanley expects to launch in the second half of 2012. Morgan Stanley mulls whether the iPhone 5 (or 'the new iPhone") may have "a higher-resolution and potentially thinner screen, new casing material, faster processor, and quad-mode baseband chip that works on multiple flavors of 3G and LTE." Ahead of the iPhone 4S launch, Morgan Stanley conducted a survey showing 62 percent of iPhone owners planned to upgrade. Assuming a similar situation for the new iPhone, that amounts to 148 million for its base model and 160 million for the bull case.
Both China and Brazil -- two huge emerging markets -- are relatively untapped by Apple. The countries, with user bases possibly at or north of 100 million smartphone users (or will be soon), haven't seen too much Apple action.
For calendar 2013, Morgan Stanley sees earnings of $80 per share. The firm also pointed to analysts not including a new TV and lower-priced iPhone, iPhone adoption excluding China which only assumes an average upgrade rate, and no multiple expansion.
Apple shares are up about 1.1 percent early Wednesday.
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