Apple (NASDAQ:AAPL)
In research notes published on Friday, analysts from Morgan Stanley noted that despite the present difficulties in the short term, they continue to have a bullish outlook on Apple (NASDAQ:AAPL).
Apple stock has been assigned an Overweight rating by KeyBanc analysts, and the business has not changed its price objective of $177. This information was communicated to investors in a note.
They went on to clarify that the company strongly advises clients to look beyond the near-term supply concerns since user growth is more significant than unit growth.
China’s supply problem is likely damaging results; thus, we pull down iPhone unit ests. 7.3M, pushing our ests. Lower, with pessimistic assumptions predicting 6M-10M iPhone units lost due to manufacturing. Supply chain diversification over time should minimize risk LT and make us discount the present; some demand may transfer to subsequent quarters.
Morgan Stanley analysts stated that even though a near-term disruption in iPhone supply is capturing the majority of investor attention, Apple’s core drivers, namely, increase in revenue per user and increase in average revenue per user, remain intact, thereby maintaining the firm’s Overweight status.
“While most investors are focused on near-term supply disruption, we think this misses the strength and health of Apple’s ecosystem, where we remain positive.” Apple stock has snagged many headlines in recent weeks, ranging from iPhone manufacturing bottlenecks in China, supply chain regional diversity, a shift in the Apple Car plan, new App Store price tiers, enhanced security and data privacy features, and more.
“We recognize that near-term supply disruptions remain a headwind to growth, and we recently cut our Dec Q iPhone estimates (again) by 3M units (to 75.5M),” they said. “However, investors continue to underestimate the strength of Apple’s ecosystem.”
Featured Image – Pexels © Armand Valendez
Author Shariq Khan 
