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Morgan Stanley is bullish on Apple's hardware performance in the second quarter of 2020

via:cnBeta.COM     time:2020/4/25 9:00:52     readed:356

On Friday, Morgan Stanley analyst Katy Huberty expressed an optimistic forecast for Apple's hardware business ahead of the April 30 earnings call. China's iPhone production appears to have exceeded expectations thanks to the resumption of operations at its factories, which is expected to drive revenue higher than expected in the quarter of june. Huberty's new forecast is 41 million units for the quarter, up about 25% from an earlier 33 million.

Apple online store (China)


Data map (from Apple)

Combined with strong asset load and 5g later this yearIPhoneMorgan Stanley analysts believe that the IT hardware business will still be the top revenue of apple.

In addition, the demand for iPhones has rebounded from a low point recently, which shows that many models are out of stock, and they have been in the front row of consumer electronics products in the United States for five consecutive weeks.

The recent release of 2020 iPhone se entry-level new machines also boosted the optimistic forecast of Apple's revenue prospects.


Apple's performance in the field of IT hardware is unique (photo from: Morgan Stanley)

Analysts say the company's share price has fallen only 6% since the market peaked on February 19. By contrast, the IT hardware industry as a whole declined by as much as 28%.

And this may be due to the high loyalty of apple users, the quality balance sheet, the continued demand of retail investors, and the fact that iPhone is in the upper limit of the upgrade cycle.

In turn, however, this could put upward pressure on the company's 2021 financial estimates.


Air quality data also show that the factory production has returned to normal (from Morgan Stanley)

Analysts estimated revenue for the March quarter at around $52.3 billion, 20% lower than previous guidance and 5% lower than market expectations. However, service revenue in the first quarter is still very good, estimated at $135 (2% higher).

Apple's second-quarter revenue guidance is forecast to exceed morgan stanley's original forecast of $46.7 billion below market expectations, though apple officials may be reluctant to respond because of some risk.

In addition, analysts expect the company to increase its repo mandate by at least $75 billion and raise its dividend to the middle and high single digits. To sum up, Morgan Stanley kept the target stock price of appl at $298 (up 1.52% to close at $279.40 on Friday).

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