Morgan Stanley ups Apple price target to $180
updated 09:35 am EDT, Tue May 26, 2009
Morgan Stanley on AAPL
Morgan Stanley's appraisal of Apple stock has been substantially upgraded, Reuters reports. The firm has pushed its price target for Apple shares up from $105 to $180, also assigning them an "overweight" rating. Apple is now at the vanguard of mobile Internet access, says Stanley analyst Kathryn Huberty, and should see iPhone-based growth for at least the next two years.
"The core of our stock call is that the iPhone's success and higher margins will begin to mute the fundamental margin and growth risks in Apple's core Mac/iPod businesses," Huberty notes.
Apple's ownership of the mobile Internet realm is said to be a considerable 38 percent, 5 percent greater than that of the same period a year ago.
The analyst further suggests that people are underestimating the potential demand for iPhones in the second half of 2009, as well as 2010. The product could generate as much as 50 percent of the company's EPS in 2010, as opposed to the 30 percent achieved in 2008. "We expect a price cut to the current generation iPhone to drive 50 percent to 100 percent (2 million to 4 million units) incremental unit demand," says Huberty. "Our survey data suggests 15 percent plus of the iPhone installed base typically upgrade to a new phone."
