In a research report issued today, Morgan Stanley analyst Kathryn Huberty reiterated an Overweight rating on Apple Inc. (NASDAQ:AAPL) with a price target of $166, which represents a potential upside of 30% from where the stock is currently trading. The analyst provided the results of her latest AlphaWise survey and her estimates for Apple iPhone and Watch.
Huberty wrote, “Our AlphaWise iPhone Tracker, which compiles sell-through data using web search analysis, indicates 53M unit end demand for the current quarter. This is unchanged from our read a month ago. Emerging markets, especially China, remain the driver of growth late in the product cycle. All else equal, the 3M unit upside to our estimate of 50M would add $1.8B to our revenue estimate of $48.3B and 11 cents to our EPS of $1.82. We believe sell-side consensus estimates recently moved higher, more in-line with our 50M estimate, while buy-side expectations are now in the low-50s on the back of strong supply and demand data points during the quarter.”
Furthermore, “Watch interest in the week of launch was about half that for the first iPhone, but the Watch has seen a much smaller deceleration since the initial spike. Both products had limited distribution at the beginning – iPhone at AT&T and Watch on the Apple online store – but the Watch has seen more supply constraints due to some component issues and we believe likely conservative demand forecasts by Apple. Apple launched the Watch in nine countries in April. In the UK and Germany, interest levels for the Watch post launch showed similar trends as the US, while in France it saw a slightly larger decline post launch. Net, we see the potential for improved distribution in C2H15 and improved Watch 2.0 features in 2016 to help capture demand implied by our recent AlphaWise survey and tracker data.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kathryn Huberty has a total average return of 17.5% and a 67.0% success rate. Huberty has a 28.9% average return when recommending AAPL, and is ranked #146 out of 3640 analysts.