Apple Stock Price: $156 Target (Down From $164) By Morgan Stanley

By Amit Chowdhry ● April 6, 2021
  • The shares of Apple Inc (NASDAQ: AAPL) have received a price target cut from $164 to $156. These are the details.

The shares of Apple Inc (NASDAQ: AAPL) have received a price target cut from $164 to $156. And Morgan Stanley analyst Katy Huberty maintained an “Overweight” rating on the company shares.

Huberty had raised the revenue forecast for Apple’s services in order to account for accelerating Google traffic acquisition cost (TAC) related revenue growth. But the price target was cut in order to reflect lower multiples that were being granted to several of Apple’s peers, according to The Street.

“Following strong March quarter App Store results and an analysis of the key drivers of Apple’s Licensing & Other segment,” wrote Huberty in the research report. “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 had forecasts that Apple Services revenue growth would accelerate to over 22% year-over-year this year and up more than 19% year-over-year previously and nearly 4 points ahead of the consensus Services growth of over 18% year-over-year.

In Q1 2021, Apple had generated a total of $15.76 billion in services revenue, including iTunes. Huberty noted that most major App Store regions saw a deceleration in year-over-year growth in the March quarter relative to the December quarter. Essentially, the high-level trends that Apple saw in the March 2020 quarter were reversing as App Store downloads dropped 9% year-over-year off of the record March 2020 quarter. And the net revenue per download grew 40% year-over-year, which was the strongest growth in spend per download in more than 3 years.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.