“Morgan Stanley‘s Katy Huberty today pounds the table in favor of shares of Apple (AAPL), reiterating an Overweight rating, and a $160 price target,” Tiernan Ray reports for Barron’s.
Just in the US, we see the potential for Apple to add 15M subscribers [per year] to its TV service, or 8% of US Apple users… Our estimate of 15M subscribers assumes 12% US household or 8% US Apple user penetration. We believe the opportunity is not limited to the 11M broadband-only households and Apple can penetrate pay-TV households over time. For comparison, Apple said 25M Apple TV set top boxes are in use today, and we believe the majority is in the US. The company also said iTunes Radio had 40M listeners in the US and Australia in May 2014, about 8% penetration of the 500M global iTunes user base. In addition, Netflix has 38M US paying subscribers, and ESPN, CBS and HBO has said their streaming products addresses a 10-12M subscriber opportunity. We also believe international is a large opportunity for Apple, which is not considered in this analysis. – Katy Huberty, Morgan Stanley
Ray reports, “If Apple can land 15 million subs, it would produce $5.5 billion in revenue and $1.6 billion in profit, she writes.”
More details in the full article here.
MacDailyNews Take: Apple is firing on all cylinders (expect an avalanche of FUD any second now)!
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