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Apple will soar 15% higher as work-from-home demand drives record sales, Morgan Stanley says

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  • Morgan Stanley raised its worth goal for Apple inventory to $152 from $144 on Thursday, implying a 15.1% surge from Wednesday’s shut over the subsequent 12 months.
  • The financial institution’s analysts anticipate the iPhone 12 lineup to revive handset gross sales and drive document quarterly income and income.
  • Extended work-from-home exercise will assist Apple‘s Mac, iPad, and Providers gross sales, the group added.
  • Watch Apple trade live here.

Report December-quarter gross sales are set to kick off a vastly constructive 12 months for Apple, Morgan Stanley stated Thursday.

Analysts led by Katy Huberty lifted their worth goal for the iPhone maker’s shares to $152 from $144, implying a 15.1% climb from Wednesday’s shut over the subsequent 12 months. The group reiterated its “obese” ranking on the inventory and views the tech sector as “enticing” over the subsequent 12 months.

Morgan Stanley expects Apple’s income and income to hit all-time highs within the fiscal first-quarter report, regardless of extra conservative forecasts from buyers. The financial institution tasks double-digit income progress throughout all 5 segments. Early indicators level to above-consensus iPhone and Providers revenues, and up to date market traits stand to amplify a post-earnings pop, the group stated in a observe to shoppers.
“Given positioning into the quarter is muted after the rotation out of high-quality shares over the previous a number of months, we anticipate robust follow-through post-earnings and are patrons into the print,” they added.

Learn extra: GOLDMAN SACHS: These 22 stocks still haven’t recovered to pre-pandemic levels – and are set to explode amid higher earnings in 2021 as the economy recovers

Apple gained as a lot as 3.3% on Thursday. Tech shares have led indexes greater in current classes after Netflix’s fourth-quarter earnings blew estimates out of the water.

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Previous earnings stories from Apple confirmed investments in its Providers and Wearables companies offsetting slowing iPhone gross sales. But the iPhone 12 lineup unveiled in late 2020 ought to reinvigorate handset income, Morgan Stanley stated.

The 5G-capable iPhones have been Apple’s most profitable product launch in 5 years, and demand continues to outstrip provide regardless of 78 million forecasted shipments within the December quarter, based on the group. Each Morgan Stanley’s fiscal first-quarter and full-year projections for iPhone shipments exceed the consensus forecast.
Elsewhere within the lineup, the analysts see extended work-from-home and remote-learning exercise propping up Mac, iPad, and Wearables revenues. Shopper survey knowledge suggests laptop and client digital gross sales hit nine-month highs within the earlier quarter as renewed COVID-19 lockdowns pressured extra folks to remain residence.

Although the information is not particular to Apple, “we consider they served as robust tailwinds” for the corporate’s computer systems and tablets, the group stated.

Apple traded at $135.70 as of 11:40 a.m. ET Thursday, up 2.3% year-to-date. The tech large has 71 “purchase” scores, 15 “maintain” scores, and three “promote” scores from analysts.

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