Morgan Stanley Sees 2008 Upside for AAPL -- Cites Steve Jobs Jet Costs
Morgan Stanley Sees 2008 Upside for AAPL -- Cites Steve Jobs Jet Costs
by , 9:50 AM EST, February 26th, 2008
Apple Inc. posted a 170% year-over-year increase in CEO Steve Jobs' jet expenses during the December 2007 quarter, and Morgan Stanley cited that and a 34% year-over-year R&D increase as signs that Apple has some meaningful product launches ahead. Apple was kind enough to oblige the investment banking firm by upgrading its mobile line shortly after the research note was published.
Seeking Alpha reported that Morgan Stanley sees lower iPod unit sales going forward, but sees margin-expansion due to the higher average selling price of the current iPod and iPhone lineup. perhaps more importantly, however, the firm sees higher Mac sales as continuing to add to Apple's bottom line.
The research note also said that Apple's retail store strategy outside the U.S. was working, and, "tends to be a positive influence on revenue growth, operating margins and valuation."
AAPL is currently trading at Morgan Stanely's 12-month bear case scenario, and maintains an Overweight rating and a US$185 target price.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.
If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.
Observer Comments
I don't know why these reports get so much attention. Soon after Morgan Stanley predicted lower iPod sales but at higher average price, Apple cuts prices on the 1GB Shuffle. Now they will be predicting the opposite.
The fact is all these predictions don't take into account any future move by Apple in terms of pricing, marketing, or new products. When these analysts talk about new products, it's interms of what they would like to see. This creates another problem in false expectations.
Why can't someone just say, based on what we have seen from Apple in the past ten years, and the ability of the company to make adjustments, we trust that the current growth will continue for at least another year. If you want to speculate, have a guess on the next market you see Apple entering.
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