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Morgan Stanley expects that Apple (AAPL) stock price could climb to $340 being powered by strong App store sales results. Today AAPL is at $324.94.
Apple Inc (NASDAQ: AAPL) stock price rose in the last trading session but was down 0.23% in the pre-market. Sources say that experts of Morgan Stanley (NYSE: MS) expect Apple (AAPL) stock to reach $340. The reasons given for this estimate are dual. Strong App store sales and an increase in revenues from services.
Katy Huberty in a research note said that revenue grew by 39% over the past year. This is the fastest growth rate since 2017. There was also an 8% increase between April and May this year. She said that June’s quarter growth estimate will be at 32% Year-on-Year.
Apple’s service forecast by Morgan Stanley hasn’t changed. The investment bank has forecasted that there will be a 16.7% growth this quarter in services. This is north of the 12% gain that has been made previously.
Katy has also further predicted that Apple has about $500 million more gains to be made as regards its stores. She also thinks that the COVID-19 pandemic is the major force behind these rising numbers. She further indicated that the shelter-in-place restrictions have boosted app ecosystems. Downloads have increased and so has revenues.
Morgan Stanley Is Optimistic about Apple (AAPL) Stock
Morgan Stanley had originally predicted that April will be the big month for App store. Katy has said that the new price rises will be a regular thing. These will be driven by higher levels of engagement.
Katy used data from Sensor Tower to draw parallels regarding App store performances by country. Similar levels in growth rates were seen for all top locations for app sales except France, Japan, Taiwan, U.S and Canada, and South Korea.
Outside the top ten clusters, other markets saw a combined 47% growth. The biggest contributor to revenue growth was the mobile gaming niche. Mobile gaming saw a 38% rise in May. Mobiel games generate about 68% of App store revenue.
a trend may be forming along these lines. We may be seeing a new path for northward revenues for Apple revenue. China which has recovered the most from the COVID-19 pandemic is showing signs of continued revenue.
Katy said that
“Barring any unexpected changes in consumer behavior, we believe App Store net revenue growth in China can accelerate once again next month.”
This shows that the patterns of behavior introduced during the movement restrictions are taking root.
The app ecosystem appears to have recovered fully. App revenue per download from February to April declined. in May these revenues are up by 12%.
Morgan Stanley has revised its revenue forecasts for 2020 and 2021 to $54.1 billion and $63.7 billion based on App store revenues.