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Morgan Stanley lowers Apple worth goal to $195 on Covid disruptions

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Katy Huberty of Morgan Stanley has lowered her Apple worth goal to $195 from $210 due to robust financial situations within the June quarter, however says Apple nonetheless stays a high choose for 2022.

In a observe to buyers seen by AppleInsider, Huberty factors out that Apple’s March quarter outcomes had been higher than anticipated. Nonetheless, her June quarter income forecast fell by 3% on account of Covid-driven provide constraints.

The important thing, nonetheless, is that Apple’s constraints are pushed by provide and never demand. The truth is, Huberty says that Apple’s demand is notably secure.

Whereas the March quarter was yet one more “clear” fiscal interval for Apple and the corporate’s June quarter commentary was “notably extra constructive,” Apple remains to be dealing with headwinds from overseas alternate, a gross sales ban in Russia, and a resurgence of Covid-19 in key Chinese language manufacturing cities.

As such, Huberty has trimmed her quarterly income forecast for Q3 2022 to $81.1 billion, down from $83.3 billion.

Regardless of the influence from Covid lockdowns and a small slowdown within the European market due to the Russia gross sales ban, Huberty believes that the the underlying well being of Apple’s product and companies ecosystem is “remarkably secure.”

“Whereas administration struck a extra cautious tone given the uncertainty of COVID lockdowns in China and continued provide shortages, underlying demand commentary was extra constructive, and we consider that an easing of COVID restrictions in China might drive upside to our new June quarter forecast,” Huberty writes. “In a market beset by quite a few challenges, Apple stays a beacon of stability, and we proceed to see Apple as our High IT {Hardware} Choose for 2022.”

The analyst’s new worth goal of $195, down from $210, relies on an implied price-to-earnings a number of of 30.3x on a brand new 2023 earnings-per-share estimate of $6.43.

Huberty’s feedback, like these from JP Morgan, come after Apple’s reporting of a monetary record-breaking March quarter.

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