Apple: Morgan Stanley sees $115-120 as a near-term floor on the stock

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By Senad Karaahmetovic

Morgan Stanley analysts reiterated an Overweight rating on Apple (NASDAQ:AAPL) stock and a $175 per share price target. Apple stock trades about 15% down since the start of December 2022, underperforming the S&P 500 by 10 points.

Reacting to recent media reports about weakening demand for Apple’s products, the analysts note that estimates for December and March quarters are already de-risked. Morgan Stanley has cut the iPhone shipment forecast twice since late October.

“We 1) have not picked up any recent readjustment to product orders in our supply chain checks, 2) have already baked in what we believe in an appropriately conservative near-term forecast, and 3) believe that bigger picture, the core drivers of Apple's model remain unchanged,” the analysts said in a client note.

They acknowledge a weak sentiment towards Apple as the market anticipates more estimates cuts but note that due to the most recent selloff, Apple now looks “attractively valued for longer-term investors.”

They highlight the $115-120 zone as “a near-term floor on the stock.”

Apple stock closed at $125.02 yesterday.