Apple shares rise as Morgan Stanley raises price target to $200

Huberty argued new products from Apple, like an augmented reality or virtual reality headset, aren't yet baked into the share price. SkipNavigationMarketsBusinessInvestingTechPoliticsCNBCTVWatchlistCramerPROMenuKeyPointsMorganStanley'sKatyHubertyraisedApple'spricetargetfrom$164to$200.HubertyarguednewproductsfromApple,likeanaugmentedrealityorvirtualrealityheadset,aren'tyetbakedintotheshareprice.InthisarticleAAPLAppleCEOTimCookgreetscustomersatthenewAppleStoreonBroadwayindowntownLosAngeles,California,June24,2021.LucyNicholson|ReutersInanotetoinvestorsonTuesday,MorganStanley'sKatyHubertyraisedApple'spricetargetfrom$164to$200andmaintainedtheequivalentofabuyrating,arguingthatnewproductsfromApple,likeanaugmentedrealityheadsetorself-drivingcar,aren'tyetbakedintotheshareprice.SharesofAppleclosedup3.5%onTuesday,reachinganewall-timehigh.HubertyalsoincreasedherDecemberquarteriPhoneshipmentforecastby3millionunitsto83millionunits,a4%increaseyear-over-year,andsaidApplehasn'thitthesamesupplyconstraintsitfacedintheSeptemberquarter.ItsaidAppStorerevenueisalsosettooutperformitsinitialforecasts."Today,weknowthatAppleisworkingonproductstoaddresstwosignificantlylargemarkets–AR/VRandAutonomousVehicles–andaswegetclosertotheseproductsbecomingareality,webelievevaluationwouldneedtoreflecttheoptionalityofthesefutureopportunities,"Hubertysaidinthenote.ThenotearguesthatApple'sstockpricehasincreasednearly500%overthelastfiveyears,drivenlargelybynewproductsandservices,andnotfromiPhonerevenue,whichhasgrown40%overthesameperiod.Meanwhile,Apple'sservicesbusinesshasgrowntonearly$70billionannuallyanditswearablesandaccessoriesbusinesscontributes$38billionannually,Hubertysaid.Hubertysaidabout6%ofApple'stotalrevenueoverthepastfiveyearshasbeengeneratedbynewproductslikeAirPods,AppleWatchandsomeofApple'sservices,whichdidn'texistfiveyearsago.ShesaidnewproductslikeanARheadset,whichcouldcontributeasmuchtorevenueastheiPaddidinitsfirstfouryearsonthemarket,maypresentsimilargrowthoverthenextfiveyears,equatingtoabouta$20pershareincreaseinApple'ssharepricetoday,ontopofMorganStanley'sexistinggrowthprojections.Meanwhile,anunconfirmedreportfromtheTaiwanesetradepublicationDigiTimesonMondaysaidAppleplanstoincreaseiPhoneproductionby30%inthefirsthalfof2022.SharesofApplesupplierslikeQualcommandMicronsawaboostTuesdaymorningtoo.ThatcountersareportlastweekfromBloombergthatsaidApplewarnediPhonedemandwasweakeningheadingintotheholidayseasonthisyear.VIDEO4:3104:31Applecanbuyback3-4%ofitssharesinthenextfiveyears,BernsteinanalystSacconaghiClosingBellTVWATCHLIVEWATCHINTHEAPPUPNEXT|ETListenTVWATCHLIVEWATCHINTHEAPPUPNEXT|ETListen