Morgan Stanley trims Apple target $30 to $298, still buying the dip

“We believe Apple is best positioned to recover to its prior long-term revenue and earnings trajectory.” — Analyst Katy Huberty

From a note to clients that landed on my desktop Friday:

Reducing estimates further to align with Morgan Stanley’s weaker global GDP forecast. We assume iPhone replacement cycle mirrors PCs in the financial crisis alongside lower product ASPs. We continue to favor Apple’s loyal customer base, strong balance sheet and upcoming 5G catalyst….

Maintains Buy rating, cuts price target to $298 from $328.

My take: This was Huberty’s third target change this year—to $368 (1/16) to $328 3/16) to $298 (4/3)—but she manages not to seem any less bullish on Apple.

From the note:

morgan stanley trims apple 298

Click to enlarge. 


  1. Jamie McDaniel said:
    I’m in good company. Katy Huberty picked $298 – same as me in the Apple 3.0 subscribers contest. 😉

    April 3, 2020
  2. Gregg Thurman said:
    PED: your Take should read $298 vs $208.

    April 3, 2020
  3. Fred Stein said:
    The intent to buy chart shows the removal of the wealth effect.

    No worry for investors who think about 5 years of cash flow per share. Neither 1.4B customers nor 23M developers will leave the ecosystems.

    April 3, 2020
  4. Gregg Thurman said:
    So, if you were Tim Cook, would you release a new iPhone now, or wait for an economic recovery first?

    I’d release it now.

    Any “SE” will have a larger (and better) screen, better internals (especially camera and battery) in the same size form factor than most upgraders are currently using for less than they paid for their iPhone 7 or 8.

    I believe the base model will be priced at $549. With a nominal trade-in ($50?) that would be about $24/month (including sales tax) for 24 months. Even hard pressed iPhone consumers can/will justify that much per month. Note I didn’t say Android consumers.

    Me? Living in the hinterlands where 5G will be rolled out last, and having an iPhone XS Max I’ll wait another year

    April 3, 2020

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