Major Bank Rating | Morgan Stanley: Apple's quarterly results may serve as a catalyst, target price maintained at $315

Golden Ten Data April 20th｜Morgan Stanley released a research report, anticipating that Apple’s upcoming earnings for the fiscal quarter ending in March and the guidance for the fiscal quarter ending in June will surpass market expectations, potentially serving as a clearing event for an upward move in stock price. The firm believes that growth in iPhone revenue will offset the impact of memory inflation on gross margin, and expects the Worldwide Developers Conference (WWDC) in June and the launch of the foldable iPhone in September to be major catalysts, driving the stock price up to $300 before September. Morgan Stanley gives Apple an “overweight” rating and maintains a price target of $315.

The report points out that although rising memory costs will put pressure on gross margins, the continued strength in iPhone, Mac, and services revenue is sufficient to offset the effects. The firm expects Apple’s guidance for earnings per share in the third fiscal quarter to be roughly in line with the market expectation of about $1.74, which is a better result than feared. Morgan Stanley estimates that Apple's revenue for the quarters ending in March and June will be 1% to 5% higher than market expectations, mainly benefiting from robust iPhone shipments and growth in Mac revenue driven by the MacBook Neo.