Apple (AAPL) has not had a bad year, but now it seems that the company is looking forward to a very positive quarter, and even a positively surprising year according to an analyst from Morgan Stanley. Both iPhone and Apple Watch demand should support the growth of the company.
That is what analyst Katy Huberty reported this week. She raised her estimates for the number of sold iPhones to 50 million, up from 46, for the quarter ending on June 30th of this year. Huberty also raised her expectations for the full financial year of 2015 and 2016 by respectively 5 and 7 percent. The analyst explained that demand in the current quarter can be explained by China and other emerging markets.
Apple Profits From Strong Demand
Meanwhile the upcoming cycle looks good for the iPhone as well. Survey results are pointing in the direction of strong demand from existing iPhone users. Almost half are planning to upgrade in 2016.
Morgan Stanley also reported that demand for the Apple Watch rose by no less than 60 percent in the United States. The company’s survey shows that on a yearly basis there is a demand for 50 million watches. Huberty did state that this would be a very positive scenario, considering the limited supply. Nevertheless she still expects 36 million watches to be sold, in comparison to her earlier estimate of 30 million.
It is not so surprising, as a consequence, that the Morgan Stanley Analyst is raising her forecast for Apple’s earnings. She forecasted earnings to be 4 percent higher compared to her previous estimations, and for 2016 she even raised her expectations by 8 percent. Her price target remains unchanged, however, at 166 dollars. In the most positive scenario, says Huberty, Apple stock could go to 195.
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