Apple to Report All-Time Record Quarterly Revenue and Earnings: Morgan Stanley

Morgan Stanley raised their stock price forecast on Apple Inc to $152 from $144 and said they are buyers of the stock ahead of the fiscal first-quarter result scheduled for Wednesday, as the consumer electronics giant is likely to report an all-time record quarterly revenue and earnings.

The iPhone manufacturer is expected to report profit growth of more than 12% of $1.41 in the fiscal first quarter of 2021 on sales of $102.61 billion, highlighted growth of over 11% from the year-ago quarter. That growth is largely driven by strong demand for its flagship iPhone handset, Mac computers, iPad tablets and wearables in the holiday season.

“Our December quarter revenue of $108.2B is 5% above consensus, while our EPS of $1.50 is 7% above consensus. We expect demand strength to continue and our FY21 revenue and EPS estimates are both 5% above consensus,” wrote Katy Huberty, equity analyst at Morgan Stanley.

“Given positioning into the quarter is muted after the rotation out of high-quality stocks over the past several months, we expect strong follow-through post-earnings and are buyers into the print. We also raise our price target to $152, from $144, as we mark our price target to market accounting for recent peer multiple expansion.”

Other equity analysts also recently updated their stock outlook. Evercore ISI raised the target price to $160 from $145. Apple had its price target boosted by Cowen to $153 from $133. The brokerage presently has an “outperform” rating on the iPhone maker’s stock.

In addition, Loop Capital lifted their price target to $155 from $131 and gave the company a “buy” rating. JP Morgan set a $150 price target and gave the company a “buy” rating.

Twenty-seven analysts who offered stock ratings for Apple in the last three months forecast the average price in 12 months at $134.71 with a high forecast of $160.00 and a low forecast of $80.00. The average price target represents a -3.14% decrease from the last price of $139.07. From those 27 equity analysts, 19 rated “Buy”, six rated “Hold” and two rated “Sell”, according to Tipranks.

Apple’s shares closed 1.61% higher at $139.07 on Friday; the stock rose over 80% in 2020. Morgan Stanley’s stock price forecast suggests a potential upside of over 9% from the stock’s current price.

Morgan Stanley also gave a target price of $200 under a bull-case scenario and $77 under the worst-case scenario. The firm currently has an “Overweight” rating on tech giant’s stock.

“Apple has the world’s most valuable technology platform with over 1.5Bn active devices and is entering FY21 with its strongest portfolio of Products and Services in years, 80% of which have been refreshed in the last 12 months,” Morgan Stanley’s Huberty added.

“We see multiple tailwinds to drive a re-rating over the next 12 months including 1) accelerating adoption of 5G smartphones, 2) work, learn and play from home demand, 3) increasing penetration of high margin services, and 4) strong cash returns. Longer-term investments in augmented reality, payments health, autos and home can help sustain growth as Apple captures more of its users time and wallet share.”

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