Ahead of the March quarter earnings report, Morgan Stanley analyst Katy Huberty is positive on Apple.
The analyst has an Overweight rating and a $210.00 per share price target on the stock.
We expect Apple to post upside to March quarter consensus revenue estimates on the back of iPhone 13 and Mac strength, which we believe more than offset weakness in iPad and the App Store in the quarter. This view is supported by a quant analysis of Apple supplier data conducted in partnership with our AlphaWise colleagues, which shows revenue upside in the March quarter.
The analyst says that the management commentary is likely to incorporate some caution as the COVID lockdowns linger.
We expect Apple to take a more cautious stance when providing commentary on the June quarter given the unpredictable nature of potential.
The current Street consensus for the June quarter appears to be high. The analyst thinks Apple will suggest a below consensus trend.
Morgan Stanley has a more conservative estimate for the FQ3.
The company is still likely to set a lower bar.
With this setup, we don’t believe investors need to be aggressive ahead of the quarter; however, we’d continue to buy shares on any weakness as we expect Apple to remain an outperformer in this more challenging market, similar to out performance in past late economic cycles.
The launch of the iPhone 14 in the fall of 2022, as well as the introduction of the augmented reality glasses in early 2023 are set to act as catalysts for shares.
Apple stock is up in pre-open.
By Senad Karaahmet.
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