Issues about iPhone 16 lead occasions might ship Apple shares decrease within the close to time period, in accordance with Morgan Stanley. Whereas the funding financial institution notes that lead occasions have doubled since final Friday, they’re nonetheless shorter yr over yr, which might enhance the probability of unfavorable iPhone construct revisions and inventory underperformance, by extension. Analyst Erik Woodring notes that previously 5 December quarters the place decrease construct revisions have taken place, earnings per share revisions for the December quarter have additionally been revised decrease by 1.7% on common. This has led to the inventory underperforming by a median of 5 factors within the three months following an iPhone launch. “What’s going to matter most over the subsequent 10 days is the trajectory of iPhone 16 lead occasions, as traditionally iPhone lead occasions elongate by way of the primary in-store availability date (Friday, September twentieth) earlier than step by step trending decrease within the weeks thereafter,” the analyst wrote in a Wednesday word to shoppers. “Subsequently, a extra sustained elongation in iPhone 16 lead occasions from as we speak needs to be considered positively, whereas a pointy reversal in iPhone 16 lead occasions after Friday would probably point out a higher danger of unfavorable iPhone construct revisions.” AAPL YTD mountain AAPL, year-to-date Apple shares have risen almost 14% this yr, and at present buying and selling ranges, Woodring sees the inventory having near-term draw back assist of $197. This suggests greater than 9% draw back from Tuesday’s shut. With that in thoughts, the analyst stated buyers can buy the inventory on any attainable cuts to estimates. That’s as a result of synthetic intelligence-driven multiyear upgrades are “a when, not an if” in his view. “Given most bulls (together with ourselves) see FY26 and the iPhone 17 as the larger cycle — with near-term iPhone 16 lead time information having little or no affect on that thesis — we imagine that any estimate cuts or near-term inventory underperformance will probably get purchased, resulting in only a brief window of underperformance earlier than buyers flip their consideration to the iPhone 17 and FY26 earnings energy,” he stated. Because of this, Woodring has an obese ranking on the inventory and a value goal of $273, which suggests about 26% upside. He has additionally named Apple as a high choose. That aligns with Wall Avenue’s largely bullish view. With 48 analysts masking the inventory, 36 of them have a powerful purchase or purchase ranking, whereas 11 are impartial. Its common goal is $240.58, implying about 11% upside. The inventory additionally at the moment has a ahead price-to-earnings ratio of about 32.7, per FactSet.
