Philip Elmer-DeWitt reports for Apple 3.0 that Morgan Stanley analyst Katy Huberty has raised the firm’s price target on Apple (AAPL) to $220 from $197.
Big picture, this strategy aligns with our thesis that Services, not devices, hold the key to Apple revenue and profitability growth over the next 5 years. However, the lack of specifics around pricing and timing limits us from raising estimates today. We still believe Apple is likely to bundle hardware/services and/or multiple services over time, with our September 2018 analysis suggesting Apple could generate $22-37B in revenue by 2025 for an Apple Media bundle alone, up from $3.8B in 2018. While we keep our estimates unchanged today, we mark our sum-of-the-parts (SoTP) driven price target to market, which captures the re-rating of Hardware and Services peers over the last 2 months, resulting in our new price target. — Morgan Stanley analyst Katy Huberty
P.E.D. also offers up 74 seconds of Loup Ventures’ Gene Munster:
Find out what the rest of the Apple analysts are saying after the compnay’s “It’s Show Time” event here.
MacDailyNews Take: In general, the analysts like Apple’s new services, but they, like the rest of us, would very much like to see the prices, launch dates and possible bundle offers (“Apple Prime”) before going further.