Morgan Stanley remains bullish on Apple

Posted:
in General Discussion edited January 2014
Apple Computer is evolving into a growth-driven portfolio franchise, says Morgan Stanley, which once again raised its price target on shares of the company's stock.



In a research note released to clients on Thursday, analyst Rebecca Runkle said evidence of the "halo effect" continues for Apple, with recent product introductions setting the company up for what?s likely to be an impressive holiday season.



"We think Apple's consumer and professional product portfolios will continue to expand next year with new Intel-based Macs, additional digital content and penetration even further into the digital living room," the analyst added.



With an expanded iPod installed base of 27 million this year (vs. 5 million a year ago assuming a 2 year replacement cycle), Morgan Stanley believes new iPods, extended digital content and recent Mac refreshes should drive "impressive" December quarter results.



Given Apple's fixed cost retail model, potential for improved professional CPU growth and expanded consumer product portfolio, the firm believes additional opportunities exist for margin and valuation expansion over time.



As a result, Morgan Stanley raised its price target on Apple shares from $60 to $70 and reiterated its "Overweight" rating on the stock, meaning it expects the return on Apple shares to "exceed the average total return of the analyst's industry coverage universe, on a risk-adjusted basis over the next 12-18 months."

Comments

  • Reply 1 of 19
    Fantastic. I look forward to holding all of my AAPL and watching it slowly inch toward 80 (wish I could've gotten in on GOOG stock, though).



    The hilarious thing is, when these companies miss their "projected earnings" by a fraction of a percent the "analysts" all complain that the company is collapsing.



    Morons.
  • Reply 2 of 19
    Buying stock high and selling for even higher is not the way to go. Its so much slower. I am aware of the risks though.



    Buy low, sell high
  • Reply 3 of 19
    yeah whats up with google. it was less than 300 a few months ago now its over $391. WTF mate???!!!



    yezzz... AAPL should hit $80, $85 probably by middle of next year when intel transition is fanta-tabulous. i wanna make a graph though that charts the linear march upwards of the stock to see what different dy/dx 's will yield.



    but first. gotta go to my cousins place and decide if i should carry through with getting a mac mini for them... they are using a win98 machine that is utterly.. i mean *utterly beyond all belief*... horked up.
  • Reply 4 of 19
    chuckerchucker Posts: 5,089member
    Quote:

    Originally posted by sunilraman

    yeah whats up with google. it was less than 300 a few months ago now its over $391. WTF mate???!!!



    Google stock is messed up. No offense to their work, but I think they are vastly overvalued.
  • Reply 5 of 19
    jeffdmjeffdm Posts: 12,949member
    Quote:

    Originally posted by Chucker

    Google stock is messed up. No offense to their work, but I think they are vastly overvalued.



    I use many Google services, but still, I agree with you. Seeing their stock prices gives me visions of pre-bubble times, and not the good kind because I agreed with Greenspan's take on the situation then. I thought investors were playing fast and dumb during the bubble, I had hoped they had learned their lesson, but I guess not.
  • Reply 6 of 19
    Quote:

    Originally posted by Chucker

    Google stock is messed up. No offense to their work, but I think they are vastly overvalued.



    Same here. I can't see paying 390 for a stock, which makes nothing tangible. You can't hold a Google product in your hand, can you?
  • Reply 7 of 19
    Quote:

    Originally posted by Glamingo

    Buying stock high and selling for even higher is not the way to go. Its so much slower. I am aware of the risks though.



    Buy low, sell high




    It's all relative, though. What was "high" a year ago...30-ish?
  • Reply 8 of 19
    Quote:

    Originally posted by His Dudeness

    Same here. I can't see paying 390 for a stock, which makes nothing tangible. You can't hold a Google product in your hand, can you?



    $390 isn't that high when you consider they're going to earn $9/share next year. They trade at a cheaper multiple than Ebay or Yahoo and have way better growth. They're a lot different than internet bubble stocks because they are actually making money - billions.
  • Reply 9 of 19
    chuckerchucker Posts: 5,089member
    Well, whatever, the least they can do is a 1:4 split.
  • Reply 10 of 19
    Quote:

    Originally posted by Glamingo

    Buying stock high and selling for even higher is not the way to go. Its so much slower. I am aware of the risks though.



    Buy low, sell high






    Tell me about it. I bought at 33 and have held on ever since. Boo-yah!
  • Reply 11 of 19
    Smart, I hope you bought alot.
  • Reply 12 of 19
    Quote:

    Originally posted by Glamingo

    Smart, I hope you bought alot.



    You can never buy enough when it's low. LOL.
  • Reply 13 of 19
    Very good come back.
  • Reply 14 of 19
    Quote:

    Originally posted by sloanlo

    $390 isn't that high when you consider they're going to earn $9/share next year. They trade at a cheaper multiple than Ebay or Yahoo and have way better growth. They're a lot different than internet bubble stocks because they are actually making money - billions.



    What, through advertising?
  • Reply 15 of 19
    I haven't checked recently, but isn't Yahoo actually making more profit than Google? I believe Google is vastly overvalued and their P/E ratio is not as good as Yahoo's. Don't burn me if it's not, just a discussion point.



    Late.
  • Reply 16 of 19
    Quote:

    Originally posted by SpamSandwich

    I haven't checked recently, but isn't Yahoo actually making more profit than Google? I believe Google is vastly overvalued and their P/E ratio is not as good as Yahoo's. Don't burn me if it's not, just a discussion point.



    Late.






    google is

    P/E Ratiot 86.18 \tMarket Capt 114.31B



    yahoo is

    P/E Ratiot 35.64 \tMarket Capt 54.61B



    apple is

    P/E Ratiot 38.46 \tMarket Capt 51.39B





    so yes, you are right about P/E. also it seems that if google was trading at the P/E ratios of yahoo and apple their market cap would be around the same as yahoo and apple.
  • Reply 17 of 19
    Overvalued like crazy. I wouldn't buy it.
  • Reply 18 of 19
    telomartelomar Posts: 1,804member
    What people see in Google is massive growth potential. Whether it will capitalise remains to be seen. That was certainly one of the trends of the dotcom boom times. People expected unreasonable amounts of growth,
  • Reply 19 of 19
    yes, people "assumed" huge amount of growth ahead of any sensible business plans, market research, common sense etc. they even gave it new names: "new economy" | "dotconomy" | "business 2.0" surprising that this is still happening now.
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