Apple had its price target cut to $156 from $164 a share by Morgan Stanley analyst Katy Huberty who concurently raised her services revenue estimate for the Cupertino Colossus.
Huberty said in a research note that the price target cut reflected lower multiples being granted to several of Apple’s peers, but maintained her overweight rating.
Huberty also said she was raising her Apple Services revenue forecast to account for accelerating Google TAC-related revenue growth (TAC refers to Traffic Acquisition Cost, or ad revenue-sharing payments to partners). She noted that strong App Store “revenue of 28% in F2Q was in-line with our forecast.”
“Following strong March quarter App Store results and an analysis of the key drivers of Apple’s Licensing & Other segment,” she said, “we raise our already above-street FY21 and FY22 Services revenue estimates by 3% and 5% respectively, and are increasingly convinced that consensus Services forecasts over the next 2+ years are too low.”
Huberty forecast that Apple Services revenue growth would accelerate to +22% year-over-year in 2021, up from +19% year-over-year previously and nearly 4 points ahead of consensus Services growth of +18% year-over-year.
MacDailyNews Take: Just last week, UBS raised its Apple price target from $115 to $142, so obviously different analysts foresee different trajectories regarding Apple’s near future, among other things.