Morgan Stanley Raises Apple Price Target to $330
Morgan Stanley analyst Erik Woodring raised the price target on Apple (NASDAQ: AAPL) to $330.00 (from $315.00) while maintaining an Overweight rating.
“Well, that was an impressive quarter and guide; PT to $330.
Tonight played out even better than our ‘tactical long’ preview implied – we got the March quarter topline strength we expected, with June-quarter guidance reconfirming our expectations for >20% Y/Y iPhone growth for a 3rd consecutive quarter.
But we also got: (1) high-margin Services materially outperforming expectations (+16.3% Y/Y vs. ~14% guide); and (2) June-quarter gross margin guidance of 47.5-48.5% coming in much better than expected – despite “significantly” higher memory costs.
For the sake of comparison, we’d also highlight that in addition to revenue and EPS growth accelerating to 16% Y/Y and 20% Y/Y in F1H26, FCF is also growing a significant 64% Y/Y in F1H (and 53% Y/Y in FY26… with just $9B of annual capex).
All in, we think last night’s report was the clearing event Apple needed to see shares outperform into the September iPhone launch: (1) revenue growth is accelerating amidst multiple product cycles (iPhone and Mac); (2) Services mix shift is persisting (43% of gross profit in March Q); (3) you have to feel better about Apple’s ability to manage record cost inflation given March Q performance and June Q gross margin guidance; (4) EPS estimates are going up 5% despite higher opex, with >$10 of EPS in FY27 now the buy-side base case (vs. ~$10 previously); (5) FCF growth is the strongest in 15 years and is materially outperforming most megacap peers (thematic winner); (6) WWDC provides potential upside optionality re: Apple’s AI initiatives; and (7) Apple has its first major iPhone form factor change in years on-deck.
Post-earnings, our FY26 EPS increases to $8.89 (vs. $8.63 previously) while our FY27 EPS increases to $10.23 (from $9.76). On an unchanged 32x target P/E multiple, our PT increases to $330 (from $315).
Own Apple into the September product launch.”
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