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Morgan Stanley ups Apple price target to $110, sees sales of up to 60M 'iWatch' units in first year

post #1 of 17
Thread Starter 
Strong customer loyalty for Apple's iPhone is predicted by Morgan Stanley to drive a so-called "halo effect" for sales of the company's rumored "iWatch," prompting the investment firm on Monday to increase its price target for AAPL stock to $110.




The new price target from Morgan Stanley, which would represent an all-time high for shares of AAPL if the prediction were to come true, was revealed in a research note to investors, a copy of which was provided to AppleInsider. In the short term, analyst Katy Huberty expects Apple will report results at the high end of Wall Street expectations when it reveals the results of its just-concluded June quarter next Tuesday.

But looking ahead to the fall and beyond, Huberty has particularly high hopes for the anticipated debut of a wrist-worn "iWatch" from Apple. She said current smart watch sales should not be used as a predictor for how a product from Apple might fare, and instead investors should look to how the company has successfully managed to sell new product categories to existing customers.

The so-called "halo effect" was first used to describe how iPod owners were switching from Windows PCs to Apple's Mac platform. But going forward, Huberty believes that the same effect may help drive strong initial sales of the "iWatch."




She sees a range of 30 million to 60 million "iWatch" units being sold in the first 12 months of availability. Her models assume an average selling price of $300 and gross margins between 40 percent and 50 percent.

She noted that historically, investors have underestimated sales of new Apple product categories based on the limited success of established products. For example, investors originally compared the iPod to the Sony Walkman, the iPhone to BlackBerry, and the iPad to netbooks, she said.

She also noted that loyalty to the iPhone brand has been increasing over time, growing from 73 percent in December of 2011 to 90 percent in March of 2014. She believes that kind of loyalty will bring new users to the "iWatch" in the first year.

Morgan Stanley's new price target is up from its previous prediction of $99. The firm also provides investors with a valuation range, which currently ranges from a bull-case high end of $132 per share, to a bear case of $74.
post #2 of 17
60 million iWatches in the first year. Lofty predictions for an as of yet unspecified and unannounced product.
post #3 of 17

Apple will sell 500,000,000 iTV on the first day.

 

There. Now tank the stock when I’m wrong.

 

Oh, and pay me $80,000 a year. These analyses don’t come cheap, you know.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #4 of 17
Looks like the whole market is up this morning, but AAPL is up quite a bit...

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #5 of 17
Quote:
Originally Posted by AppleInsider View Post

Morgan Stanley's new price target is up from its previous prediction of $99. The firm also provides investors with a valuation range, which currently ranges from a bull-case high end of $132 per share, to a bear case of $74.

 

+/- 30%???

 

Well, that target range certainly covers her ass...

Why does Apple bashing and trolling make people feel so good?

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Why does Apple bashing and trolling make people feel so good?

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post #6 of 17
post #7 of 17
Originally Posted by Dickprinter View Post

+/- 30%??? Well, that target range certainly covers her ass...

 

You don’t mean it, but that’s a pretty good insult as to the proportions of her size of her measurements, after all. So I’ll take it. She deserves it.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #8 of 17
Quote:
Originally Posted by AppleInsider View Post

analyst Katy Huberty

post #9 of 17
Quote:
Originally Posted by Tallest Skil View Post
 

Apple will sell 500,000,000 iTV on the first day.

 

There. Now tank the stock when I’m wrong.

 

Oh, and pay me $80,000 a year. These analyses don’t come cheap, you know.

 

So do you believe Apple shares should be priced higher, or lower, than they currently are?

post #10 of 17
Originally Posted by Frood View Post
So do you believe Apple shares should be priced higher, or lower, than they currently are?

 

Whichever will net me, personally, the most money, either from my handlers for shorting or from selling stock. Higher.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #11 of 17
The silliness quotient on this prediction is almost comical and paints Apple customers in a poor light. Granted, if Apple comes out with a wristworn computing device chances are pretty high that it will not suck. But to say it will sell 60M units when consumers have no idea about what it will do or whether they need it makes it sound like Apple customers will buy anything that Apple sells regardless of its merit. That's nuts and fortunately Apple knows it too. But it makes for a good Monday morning laugh at Morgan Stanley's expense. What a bunch of goofballs.
post #12 of 17

Looks like Wall Street wants to make money off of Apple again. Then when Apple does not meet their imaginary expectations they can downgrade the stock & play this game all over again.

post #13 of 17
Quote:
Originally Posted by Splif View Post

Looks like Wall Street wants to make money off of Apple again. Then when Apple does not meet their imaginary expectations they can downgrade the stock & play this game all over again.
Wall Street wouldn't turn down money from a stoning if they could figure out a good angle. 1hmm.gif
melior diabolus quem scies
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melior diabolus quem scies
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post #14 of 17

I still cannot believe that there will be a single "iWatch". As I go over all the stuff I've read, I can count at least three possible models: 1) a fitness model, 2) a health monitor (maybe even two, specialized for cardiac problems and for diabetes), and 3) a luxury model (think real Swiss movement with a subtle notification function - maybe not a watch per se but a technology to be licensed).

 

Plus, even though they got the trademark, I can't believe Apple would actually use the name "iWatch".

"You can't fall off the floor"   From 128k Mac to 8GB MBP

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"You can't fall off the floor"   From 128k Mac to 8GB MBP

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post #15 of 17
Quote:
Originally Posted by Gatorguy View Post

Wall Street wouldn't turn down money from a stoning if they could figure out a good angle. 1hmm.gif

Marijuana stocks. 😆

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #16 of 17
Quote:
Originally Posted by Rogifan View Post

Meanwhile, Samsung is clearly getting desperate. lol.gif

http://www.cnet.com/news/samsung-readies-galaxy-alpha-for-war-with-iphone-6-report/
Huh, they'll probably price it at $1000 and throw in gs5 in metal body, oh and a quad hd larger screen so it's gimmick.
post #17 of 17
so this is my prediction:

1) the iWatch will debut at a price greater than $500 & be a luxury item

2) the analysts and tech pundits will slam Apple for its outrageous pricing

3) we will all want one

4) they will sell like hotcakes

5) the other competitors will give up trying to compete

6) except Samsung who will make a crappy
big screen version

tell me i'm wrong
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