Apple Shares up After Morgan Stanley Raised Price Target

Dec 7, 2021 By MarketDepth

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Apple (NASDAQ: AAPL) shares rose 2.7% on Tuesday morning, after Morgan Stanley analyst Katy Huberty raised the company’s price target from USD164 to USD200. Furthermore, Huberty kept Apple’s ‘overweight’ rating in place, noting that upcoming items from the company, such as an augmented reality headset and autonomous vehicles, were not yet integrated into the share price.

Advancing Self Driving

Last month, Bloomberg news disclosed that the tech giant was advancing plans to build a self-driving vehicle, and could potentially launch the car as soon as 2025. Meanwhile, Wedbush analyst Dan Ives told TheStreet that the Apple Car is “not a matter of if, it’s a matter of when.”

83 Million Phones

Additionally, Huberty raised her December quarter shipment forecast for the iPhone to 83 million units, up from its previous outlook of 80 million. Additionally, App store revenue is predicted to outperform its initial forecasts.

“Despite a consistent and material revenue contribution from new products and services over time, Apple shares don’t seem to bake in the impact from upcoming new product launches. We believe this will change as Apple approaches the launch of an AR/VR product over the next year.”

Katy Huberty, Morgan Stanley Analyst

“Today, we know that Apple is working on products to address two significantly large markets – AR/VR and Autonomous Vehicles – and as we get closer to these products becoming a reality, we believe valuation would need to reflect the optionality of these future opportunities,” Huberty said in the note.

Apple Stock Up 500% in 5 Years

The note also revealed that Apple’s stock price has shot up almost 500% throughout the last five years amid new products and services, not including iPhone revenue. Apple’s services business has grown to almost USD70 Billion annually, while its wearables and accessories business generates USD38 Billion annually, Huberty said.

Sales Affected By Chip Shortage

Meanwhile, CEO Tim Cook said that the company’s holiday quarter sales will also be affected by the chip shortage. Cook told Reuters that “we’re doing everything we can do to get more (chips) and also everything we can do operationally to make sure we’re moving just as fast as possible.”