Morgan Stanley’s bull case puts Apple market cap over $4 trillion

In a new research report this past week, Morgan Stanley analyst Erik Woodring argues that India is, and will continue to be, a key growth driver for Apple. Woodring thinks that over the next five years, India will account for 15% of Apple’s revenue growth, eventually reaching 20% of its installed base of device users.

Eric J. Savitz for Barron’s:

The analyst notes that India, which recently passed China to become the most populous country on Earth, accounted for just 2% of Apple’s revenue over the past five years, with a run rate of about $6 billion. Compare that with China, which has been about 18% of Apple’s revenue over the past five years, now generating $75 billion a year in revenue.

Woodring thinks the gap is going to start to close, given both a booming Indian economy and Apple’s investments in the country. The company has opened its first stores there, added local manufacturing, and created financing options to make iPhones more affordable. The stage is set, he says, “for India to become Apple’s next growth frontier.”

According to Woodring, Apple’s revenue from India should reach $40 billion over the next decade — and by 2032, he thinks India will account for 10% of the world’s Apple users…

Based on his increasingly bullish view of Apple’s position in India, Woodring recently lifted his Apple target price to $220 from $190, with a “bull case” of $270. If that happens, Apple would blow past $4 trillion, on the way to $5 trillion.

MacDailyNews Take: Also in the Morgan Stanley note, “All-in, this means that India will be just as important to Apple’s growth algorithm over the next 5+ years as China was in the last 5 years, something we believe the market under-appreciates today.”

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