“It’s only been seven weeks since Morgan Stanley analyst Katy Huberty elevated Apple onto Morgan Stanley’s ‘Best Idea’ list on the strength of what her proprietary surveys and Apple’s forward-looking statements were saying about iPhone sales,” Philip Elmer-DeWitt reports for Fortune.

“So the note she issued to clients Sunday night was a bit of a shock,” P.E.D. reports. “According to Huberty, rising international prices and smartphone market oversaturation outside China are weighing on Apple’s primary source of revenue (52% of fiscal 2015 sales). The same surveys that showed iPhone sales rising 6.8% in fiscal 2016 now show them falling 5.7%.”

“Apple is still a Morgan Stanley ‘Best Idea.’ Hubert sees Apple’s market share increasing to record levels in 2016, up 8% in the U.S. and 2% in China,” P.E.D. reports. “Anticipating a strong reaction, Morgan Stanley has lowered its Apple price target 12%, to $143 from $162.”

Read more in the full article here.

MacDailyNews Take: Year-end actionable “research” designed to generate buys and sells from clients – and, most importantly, commissions for the brokerage firms.

As Jay Somaney explained regarding an AAPL note by Credit Suisse for Forbes on November 10th:

This is a commission generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case may be.

The calls from the brokers to their clients would be something along the following lines:

• To a client that is already long the broker would say, “our analyst just found out some information not yet out on the Street and he says shares will remain weak for weeks and quarters and you should sell yours hares in Apple and buy XYZ instead.”
• To a client that has no position in Apple, the broker would say, “our analyst just made a great call on Apple and the shares are down around $3 per share and I know you have wanted to buy Apple and here is your opportunity. He still has an Outperform on the stock with a $140 price target.”

So, what the analyst did here is come out with a negative note that will get the shares moving, in this case lower (matters not actually) and allow the brokers to call their clients and ask them to buy/add/sell as the case may be.

It’s called an “actionable” research report in the business.

Wall Street is a game – and a slimy, rigged one at that. Understand the “rules” in order to play it well.

SEE ALSO:
Apple stock slides on Credit Suisse claims of iPhone component order cuts, weak iPhone 6s demand – December 2, 2015
UBS analyst’s latest ‘research’ note on Apple is just another ‘actionable’ note and should be totally ignored – November 16, 2015
Apple shares continue to get slammed on commission/bonus related ‘actionable research’ – November 10, 2015
Apple lower after Credit Suisse notes substantial supply-chain cuts – November 10, 2015