or Connect
AppleInsider › Forums › Investors › AAPL Investors › Morgan Stanley: Apple stock no longer a 'Best Idea,' but still recommended
New Posts  All Forums:Forum Nav:

Morgan Stanley: Apple stock no longer a 'Best Idea,' but still recommended

post #1 of 32
Thread Starter 
Though it still recommends the stock to investors, Morgan Stanley this week removed Apple from its "Best Ideas" list, citing the company's outperformance of the market over the last six months.

However, analyst Katy Huberty noted that AAPL remains a "top pick" due to long-term growth potential for the company. But Apple is no longer on the company's "best ideas" list, because it was up 28 percent over the last six months, while the S&P was up 14 percent.

Huberty said that in the last half-year, the gap between her estimates and Wall Street consensus has narrowed, which contributed to the stock being removed from the list.

AAPL was named a "Best Idea" for investors by Morgan Stanley this May, highlighting the stock as one of the best options on Wall Street. It was a major turnaround for Huberty, who was notoriously negative on the company's stock, suggesting the iPhone was too expensive even at a $199 subsidized price.

Still, this week Huberty said she sees four key long-term growth drivers for the company's stock. They are:
Smartphone market growth and expanded iPhone distribution
The tablet market opportunity
Rising enterprise adoption
The Chinese consumer
She also disagrees with some investor concerns that Apple's margins may have peaked. The company has warned investors that its gross margins will continue to decline due to aggressive pricing on new products like the iPad and MacBook Air.



"We believe Apple will limit major iterations to its product line in (calendar year 2011) in order to flow component cost and manufacturing yield/volume benefits through to the bottom line," Huberty wrote. "As a result, we see upside to both (calendar fourth quarter 2010) and (calendar year 2011) gross margin expectations."

The analyst expects an iPhone on the Verizon network in early 2011, a new, lower priced iPad in April, and the iPhone 5 in June 2011. She also predicts a "smart TV," redesigned iPad and 4G LTE iPhone from Apple all in 2012.
post #2 of 32
$375 price target?

Most knowledgeable analysts passed that point months ago. Many run $400-430, nowadays.

Of course, she gives herself a cone of safety which is truly lacking confidence in her abilities to analyze.
post #3 of 32
I can just imagine her report ended with ... 'sent from my Blackberry'
Use duckduckgo.com with Safari, not Google Search
Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
Reply
Use duckduckgo.com with Safari, not Google Search
Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
Reply
post #4 of 32
Quote:
Originally Posted by AppleInsider View Post

However, analyst Katy Huberty noted that AAPL remains a "top pick" due to long-term growth potential for the company. But Apple is no longer on the company's "best ideas" list, because it was up 28 percent over the last six months, while the S&P was up 14 percent.

cause double the average market isn't great...


Quote:
Originally Posted by AppleInsider View Post

She also predicts a "smart TV," from Apple all in 2012.

wait.... do you mean like the Apple TV....

PC means personal computer.  

i have processing issues, mostly trying to get my ideas into speech and text.

if i say something confusing please tell me!

Reply

PC means personal computer.  

i have processing issues, mostly trying to get my ideas into speech and text.

if i say something confusing please tell me!

Reply
post #5 of 32
Hmmm I know, I might sell my entire position right before the best quarterly results EVER....


Second thoughts. Maybe not.
post #6 of 32
Quote:
Originally Posted by Eideard View Post

$375 price target?

Most knowledgeable analysts passed that point months ago. Many run $400-430, nowadays.

Of course, she gives herself a cone of safety which is truly lacking confidence in her abilities to analyze.


Actually, knowing how Apple stock bounces all over the place with rumors and fact I could very well see apples stock bouncing around in that cone of hers, it actually a good view of what to expect next year.

She is actually telling investor if you buy now here is what to expect so do not be surprise if it goes up or down in that range.
post #7 of 32
Just like a stock analyst to start making product predictions..... Any info on how this particular one has scored with forecasts in the past?
post #8 of 32
Isnt she usually very incorrect able what to expect from Apple?


Quote:
Originally Posted by digitalclips View Post

I can just imagine her report ended with ... 'sent from my Blackberry'

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
Reply
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
Reply
post #9 of 32
She finished the 'pump', now the 'dump'.
Classic Huberty, always wrong.
post #10 of 32
Looks like she is leaving at least 6 months too early in my book. AAPL does plateau for a period before running higher, and it looks to me like there is a month left before the next one. China alone can help Apple meet all the optimistic growth targets... And they aren't even providing enough supply there to meet demand.

Here's hoping to another 20% before the end of January!
post #11 of 32
Quote:
Originally Posted by aaarrrgggh View Post


Here's hoping to another 20% before the end of January!

The other day a shoe shine boy was telling me ab out the money he made with Apple stock. He recommended that I buy more.

Joseph P. had a comment on this situation.
post #12 of 32
Quote:
Originally Posted by studiomusic View Post

She finished the 'pump', now the 'dump'.
Classic Huberty, always wrong.

So you are accusing her of committing a federal crime? I won't ask you for your evidence for this, because I know you haven't got any.

I can somewhat understand the partisanship on a board like this, but actual stock investors need to go about it with something more than a white cane and wishful thinking. While you are free to agree or disagree with her analysis (a factual basis will be taken more seriously), she does raise valid points which actual investors are actually thinking about.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #13 of 32
Quote:
Originally Posted by aaarrrgggh View Post

Looks like she is leaving at least 6 months too early in my book. AAPL does plateau for a period before running higher, and it looks to me like there is a month left before the next one. China alone can help Apple meet all the optimistic growth targets... And they aren't even providing enough supply there to meet demand.

Here's hoping to another 20% before the end of January!

She hasn't "left" the stock. Morgan still recommends it, they are simply taking off one of their special lists. We've seen this kind of thing before and we'll see it again.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #14 of 32
Quote:
Originally Posted by Dr Millmoss View Post


I can somewhat understand the partisanship on a board like this, but actual stock investors need to go about it with something more than a white cane and wishful thinking. While you are free to agree or disagree with her analysis (a factual basis will be taken more seriously), she does raise valid points which actual investors are actually thinking about.

The problem is Huberty like most analysts doesn't have a clue. They usually make a move after the stock is well on it's way up or down. Huberty gave Apple a $95 target way back in December 2008. The stock has been on a steady rise since then. As a matter of fact if you would have bought some 2 days after her target, you made a messily 242%.
post #15 of 32
Windows phone 7 is now here. The Apple hegemony is over...
post #16 of 32
Quote:
Originally Posted by GotWake View Post

The problem is Huberty like most analysts doesn't have a clue. They usually make a move after the stock is well on it's way up or down. Huberty gave Apple a $95 target way back in December 2008. The stock has been on a steady rise since then. As a matter of fact if you would have bought some 2 days after her target, you made a messily 242%.

Yes, some of them are better than others in their forecasts. But most people don't seem to understand several important things about these analysts. First, they are making these comments for the consumption of their clients. Second, they are constitutionally conservative. Third, they are constantly revising their estimates for the companies they cover. I'm not sticking up for Huberty in particular, but I think it's more than a little unfair to criticize any analyst's forecasts made during the midst of the 2008 market panic. The wheels were falling off and nobody knew what was going to happen next. As it was, we ended up with two years of miserable economic growth -- and it could have been much, much worse. So if you consider this in light of the three things I mentioned above, forecasts should come as much less of a surprise.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #17 of 32
I have yet to find a single stock analyst who is intelligent and provides suggestion for the interest of their client or investors before the curve. All of their information is stale and something any person who is a bit intelligent can deduce from the market and financial reports. This folks look out for their own pockets first before their clients and they move with the band wagon.

Anyway, even though James Cramer on CNBC might be loud and obnoxious, but he sticks with his recommendations (even if his recommendation is going down) and he more like the guy on the street. Sure, he had made bad calls, but overall he is the stock analyst for rest of us.
post #18 of 32
Quote:
Originally Posted by xSamplex View Post

Windows phone 7 is now here. The Apple hegemony is over...

good one ... I assume it was a joke right?
Use duckduckgo.com with Safari, not Google Search
Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
Reply
Use duckduckgo.com with Safari, not Google Search
Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
Reply
post #19 of 32
Quote:
Originally Posted by enohpI View Post

The other day a shoe shine boy was telling me ab out the money he made with Apple stock. He recommended that I buy more.

Joseph P. had a comment on this situation.

That may in fact be the ONLY valid stock comment on this board today. I'd worry more except that Apple still can't make the product(s) fast enough, so we are still short of bubble-land.
post #20 of 32
I think Apple's stock will stay around $300.00 per share or more for a while because they have a solid business model right now. I'm crazy for Apple's swag. I can't wait to trade in my 1st generation iPad ( 16 gig wifi with 3G) for the iPad 2. Also I can't wait to get an Apple tv.
post #21 of 32
Wall Street... Damned if you do, damned if you don't...

"We don't recommend buying your stock because we don't think your product will do well against the competition, or the product is an unknown device we're not sure people will like, or your margins are too high to compete in a commodity market against millions of common-denominator products."

Fast forward...

"We don't recommend buying your stock because you have out-performed our expectations, and we don't think there is any more 'up' - you have reached our imaginary ceiling, plus you've told us your margins are going to drop as you build the most price competitive product in its segment, and because demand is so high, it's nearly impossible for you to build enough devices to gratify everyone instantly."
post #22 of 32
Quote:
Originally Posted by radster360 View Post

I have yet to find a single stock analyst who is intelligent and provides suggestion for the interest of their client or investors before the curve. All of their information is stale and something any person who is a bit intelligent can deduce from the market and financial reports. This folks look out for their own pockets first before their clients and they move with the band wagon.

Anyway, even though James Cramer on CNBC might be loud and obnoxious, but he sticks with his recommendations (even if his recommendation is going down) and he more like the guy on the street. Sure, he had made bad calls, but overall he is the stock analyst for rest of us.

I hardly think so. Like their forecasts or not, they are basing them on information that most of us don't have at the ready. Few people crunch these numbers. As for Cramer, he's a TV performer, not an analyst. Sticking with a recommendation whether it was a good or bad call certainly does not inspire confidence.

Quote:
Originally Posted by mytdave View Post

Wall Street... Damned if you do, damned if you don't...

"We don't recommend buying your stock because we don't think your product will do well against the competition, or the product is an unknown device we're not sure people will like, or your margins are too high to compete in a commodity market against millions of common-denominator products."

Fast forward...

"We don't recommend buying your stock because you have out-performed our expectations, and we don't think there is any more 'up' - you have reached our imaginary ceiling, plus you've told us your margins are going to drop as you build the most price competitive product in its segment, and because demand is so high, it's nearly impossible for you to build enough devices to gratify everyone instantly."

Not really. Morgan is still recommending AAPL. But is also true that a stock can overrun, in which case it makes perfect sense for analyst to say that it's gotten too expensive in the immediate term, if that's what they think. There's no ceiling, expressed or implied, imaginary or otherwise.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #23 of 32
Quote:
Originally Posted by mytdave View Post

Wall Street... Damned if you do, damned if you don't...

"We don't recommend buying your stock because we don't think your product will do well against the competition, or the product is an unknown device we're not sure people will like, or your margins are too high to compete in a commodity market against millions of common-denominator products."

Fast forward...

"We don't recommend buying your stock because you have out-performed our expectations, and we don't think there is any more 'up' - you have reached our imaginary ceiling, plus you've told us your margins are going to drop as you build the most price competitive product in its segment, and because demand is so high, it's nearly impossible for you to build enough devices to gratify everyone instantly."

Love IT :-)
post #24 of 32
One thing's for sure, people do tend to get what they deserve.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #25 of 32
Dr. I hear what you say, but I don't completely agree. Yes, some of the good analyst (microscopically small amount) might not only look at the financial reports, but will look at all the other supporting information, such as flooding in China could hold some production line, etc. etc. and it's impact. But, most of them are using information that is provided and easily comprehensible by listening to their earlier calls or by just looking at the packed Apple Stores or watching people at any intersection and seeing how many of them are using Apple devices. Yes, Morgan Stanley has not removed AAPL from recommendation list, but this whole notion of removing from "Best Idea" list and the reason they mention are rather pathetic.

Quote:
Originally Posted by Dr Millmoss View Post

I hardly think so. Like their forecasts or not, they are basing them on information that most of us don't have at the ready. Few people crunch these numbers. As for Cramer, he's a TV performer, not an analyst. Sticking with a recommendation whether it was a good or bad call certainly does not inspire confidence.



Not really. Morgan is still recommending AAPL. But is also true that a stock can overrun, in which case it makes perfect sense for analyst to say that it's gotten too expensive in the immediate term, if that's what they think. There's no ceiling, expressed or implied, imaginary or otherwise.
post #26 of 32
That's OK by me.

Morgan Stanley hasn't been a "Best Idea" in decades!
Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
Reply
Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
Reply
post #27 of 32
Quote:
Originally Posted by radster360 View Post

Dr. I hear what you say, but I don't completely agree. Yes, some of the good analyst (microscopically small amount) might not only look at the financial reports, but will look at all the other supporting information, such as flooding in China could hold some production line, etc. etc. and it's impact. But, most of them are using information that is provided and easily comprehensible by listening to their earlier calls or by just looking at the packed Apple Stores or watching people at any intersection and seeing how many of them are using Apple devices. Yes, Morgan Stanley has not removed AAPL from recommendation list, but this whole notion of removing from "Best Idea" list and the reason they mention are rather pathetic.

The "Best Idea" list is a gimmick. In fact most of the stock recommendation lists can be viewed as gimmicks, because they aren't comparable with each other in terms of the terminology or the criteria used. This kind of thing is of very little interest to investors. Of far more interest to me as an AAPL stockholder is the stock's serious underperformance over the last few weeks.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #28 of 32
Why follow a brokerage house report for an analyst who blew it in the past?
At least it's better than Gartman's report of last Oct, saying that Apple innovates, designs and builds nothing. Too bad Gartman you missed out on Apple's gains; buy now for the future gain or shut up !
post #29 of 32
Quote:
Originally Posted by solipsism View Post

Isnt she usually very incorrect able what to expect from Apple?

In a field comprised mostly of idiots, if she's not the worst she's certainly one of them: Worst Analyst on Apple Lowers Price Target
A is A
Reply
A is A
Reply
post #30 of 32
On 9/29.2008, Elmer DeWitt wrote:"In a survey of eight leading Apple analysts [in Sept. ,2007], Huberty was rated the "worst" based on her ability to estimate the company's quarterly sales."
On Nov. 5 of this year, SAI wrote:"Morgan Stanley's Katy Huberty is becoming another bull on shares of Apple. In her "bull case" scenario, Apple ships 80 million iPhones and 40 million iPads in calendar 2011, driving its stock to $500 a share by next August. The key to Apple's future growth: China. The Chinese have a taste for "aspirational brands" like iPhones, iPods and iPads. Here "bear case" assumes 55 million iPhones and 25 million iPads."
post #31 of 32
Quote:
Originally Posted by xSamplex View Post

Windows phone 7 is now here. The Apple hegemony is over...

I'm a huge supporter of the windows phone, but even I can't agree with that. Apples going to be leading the way for many years to come.

However when thinking long term I would think less about the success of the iPhone and more about the failure of Apple tv. Apple making a phone was easy, everyone was predicting for years that they could make an amazing phone. The question though is where do they go from here? TVs are the next obvious move but its not exactly high profits. A games consoles another idea but could they really beat Xbox and Playstation with there dedicated followers?

There's a lot of growth still needed in terms of profit to justify that share price, people are predicting they will do it, the question is though, how?
post #32 of 32
But Oprah declared iPad was her "most favorite thing -evah!"
Doesn't Morgan Stanley watch her?
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: AAPL Investors
AppleInsider › Forums › Investors › AAPL Investors › Morgan Stanley: Apple stock no longer a 'Best Idea,' but still recommended