Apple Stock News
Morgan Stanley analyst Katy Huberty has a new, extremely bullish note on Apple, where she has raised the base target price for the company from $130 to $160. She notes that Apple is the world’s most valuable technology platform, with very loyal customers willing to pay a premium for the best user experience. This being the case, its current Price to Earnings (P/E) ratio of 15 is too low, and should be closer to 18 in line with large-cap technology companies Microsoft, Google, and Facebook.
Huberty noted that the company’s products and services addressed user needs in 33% of their day, a figure that could increase to 75%. Apple’s strong platform becomes a cycle as users buy many devices, known as the halo effect, which attracts and locks in new users. According to Huberty, Apple could quadruple its total addressable market by 2020 to $3.4 trillion. It would do so through the wearables market, TVs, and cars.
The Apple Watch will help the company take over a greater portion of the day in the near future, including when we sleep. Meanwhile, Huberty sees the car as potentially becoming the fourth screen for consumers, after the PC/tablets, smartphones, and TVs. Apple is rumored to be developing its own car, as reports have suggested it has hired auto experts and has established a top-secret team to invest in car technologies. The auto market industry could be worth up to $1.6 billion for Apple, four times as large as the smartphone industry and eight times larger than the PC market value.
