Gold bars to be exempt from tariffs, White House clarifies
On Monday, Morgan Stanley (NYSE:MS) increased the price target for Apple stock (NASDAQ:AAPL) to $235 from $220, while keeping an Overweight rating on the shares. Currently trading at $209.28 with a market capitalization of $3.14 trillion, Apple remains a dominant force in the technology sector. The firm’s analysts suggest that while they do not anticipate the upcoming earnings report to significantly influence the stock’s performance, they believe the price will stay within a certain range in the near term, with $170 acting as a support level. According to InvestingPro data, the stock has shown significant momentum with an 8.35% return over the last week.
The analysts at Morgan Stanley noted that several key issues, such as tariffs, China’s market, advancements in artificial intelligence, iPhone sales growth, and regulatory challenges, may not be addressed in the earnings report. They expect these topics to gain clarity over the next year. Despite the lack of immediate catalysts, the analysts see potential for Apple’s stock to reach their revised price target, emphasizing that Apple remains the most underowned megacap stock globally. InvestingPro analysis shows Apple maintains strong financial health with a 46.52% gross profit margin and has been aggressively buying back shares, demonstrating management’s confidence in the company’s future.
The firm anticipates that Apple’s path to the $235 price target and a possible $284 bull case valuation will be driven by positive revisions to estimates and expansion of the stock’s multiple. They highlight that Apple’s strong free cash flow conversion and growth in its Services segment are undervalued compared to other megacap companies, which could lead to future valuation tailwinds. InvestingPro data reveals Apple’s impressive annual revenue of $395.76 billion and consistent dividend growth, having raised dividends for 13 consecutive years. Get access to 10+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.
Morgan Stanley’s analysis underscores their belief in Apple’s long-term value, despite the current lack of short-term catalysts. The analysts maintain their positive outlook on the stock, suggesting that the company’s financial health and market position will contribute to reaching the new price target over the next 12 months. For a deeper understanding of Apple’s valuation and growth potential, access the comprehensive Pro Research Report available exclusively on InvestingPro, which provides detailed analysis of the company’s financial health, valuation metrics, and growth prospects.
In other recent news, Alphabet (NASDAQ:GOOGL) reported first-quarter earnings that exceeded expectations, driven by strong performance in its search advertising business. Analysts, including those from Citigroup (NYSE:C), have noted the positive impact of Alphabet’s AI products and its promising search and cloud results. Meanwhile, Apple is planning to move its U.S. iPhone assembly to India next year, a strategic shift in response to the ongoing trade tensions between the U.S. and China. Additionally, Apple’s future iPhone 17 models are expected to feature 12GB of DRAM, as reported by TF International Securities analyst Ming-Chi Kuo, which could benefit suppliers like Micron (NASDAQ:MU) and SK Hynix.
UBS has revised Apple’s stock price target down to $210 from $236 while maintaining a Neutral rating, citing anticipated tariffs. Despite this, UBS increased its revenue forecast for Apple’s March quarter to $95.5 billion, surpassing the Visible Alpha consensus, due to accelerated iPhone shipments and currency fluctuations. The earnings per share estimate for the same period has also been raised to $1.62, reflecting better-than-expected demand for Mac computers. These developments highlight Apple’s strategic management of supply chain challenges and product shipments. The Magnificent Seven stocks, including Apple and Alphabet, experienced fluctuations amid uncertainties around U.S.-China tariffs, reflecting broader market reactions to geopolitical tensions.
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