Morgan Stanley Increases its Apple Price Target to $368 Per Share

In an analyst note published earlier today, Morgan Stanley has raised its price target for Apple from $296 per share to $368 per share, CNBC is reporting. While analysts at Nomura have also raised their AAPL price target to $280, they have cautioned that inflated iPhone 12 expectations “may make the music stop.”

Questioning market enthusiasm about a “5G supercycle,” Nomura analysts noted that upgrade rates declined during the 3G to 4G cycle and that Apple has ordered between 75 and 85 million iPhone 12 models for the second half of 2020, a number only 10% higher than Apple’s orders for iPhone 11 models during the second half of 2019.

On the other hand, Morgan Stanley analysts believe Apple’s stock will continue to outperform its hardware peers based on the upcoming 5G product cycle.

“Longer battery life and upcoming 5G technology which will enable new functionality like Augmented Reality combined with aggressive trade-in offers that subsidize upgrades for existing iPhone owners suggest replacement cycles can’t stretch much further and may in fact begin to shrink.”

Morgan Stanley also pointed out that Apple’s dependency on the iPhone for earnings has declined, with services and wearables now constituting 27% and 37% of profits.