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With shares of Apple on a chart-topping climb, investment bankMorgan Stanley has lifted its price target for the stock to $720,with a 12-month bull case estimate of $960. Apple's stock reached new heights on Tuesday, up 2.92 percent at market close. Shares of the companyhave been on a rally since the beginning of the year and haveclimbed 40 percent to $568.10. Analyst Katy Huberty sent a note to investors Tuesday informingthem that Apple had been added to the firm's Best Ideas list. Theanalyst continues to believe that investors "underestimate" Apple'sstrong position, raising her price target from $515 to $720. Shealso said the stock could climb as high as $960 by next March in abull case scenario. Morgan Stanley's new target is one of the highest seen to date. The Street reported last week that FBN Securities had set a new Wall Street record with its AAPLprice target of $730. The previous high was Barclay's Capital's$710 price target. Enterprise tablet adoption combined with demand upside from alower-priced iPad; a strong upgrade cycle for LTE-capable iPhonelater this year and emerging market iPhone (plus iPad, Mac) growthdriven by new carriers are all potential upside drivers in hermind. In addition, Huberty added that the world's largest carrier,China Mobile, "could add more incremental iPhone shipments" nextcalendar year than the Street currently expects. According to a January 2012 CIO survey by Morgan Stanley, 56percent of U.S. companies already purchase tablets for corporateuse. Assuming Apple manages to maintain an 80 percent share of theenterprise tablet market, Huberty believes enterprise iPadpurchases could reach 9 million units and $5 billion in revenue forApple next calendar year. Meanwhile, consumer demand is also expected to remain robust. Asurvey from late last year showed that 13 percent of U.S. consumersexpect to buy an iPad in the next 12 months. Huberty pointed outthat the data indicates as many as 80 million unit sales globallynext year. The analyst also suggested that the $100 price cut onthe iPad 2 could bring about more than 15 million U.S. iPad salesand over 35 million global sales. The analyst said Apple's next-generation iPhone is likely toinclude a "higher-resolution and potentially thinner screen, newcasing material, faster processor, and quad-mode baseband chip thatworks on multiple flavors of 3G and LTE." Based on a recent surveyindicating 62 percent of iPhone owners planned to upgrade to theiPhone 4S, the release of an LTE iPhone later this year would implya base case of 148 million and bull case of 160 million upgradepurchases, supplemented by 38 million and 86 million shipments tonew users. Huberty named China and other emerging markets, like Brazil, as"huge untapped markets" for Apple that present a long-term upsidefor the company. Emerging markets have 14 times as many members ofthe smartphone-friendly 25- to 34-year-old age group than WesternEurope and North America. Apple only directly address 20 percent ofChina's high-end subscriber market, Huberty said, adding that aChina Mobile-compatible iPhone would reach the other 80 percent. Morgan Stanley presented its $80 earnings per share and $960valuation bull case as "reasonable" because of several factors:Apple's capital expenditure forecast predicts a "similar revenuetrajectory;" the estimate doesn't include new product categoriessuch as an HDTV or a low-price iPhone; the forecast of 129 millioniPad units is in-line with current survey data; predictions foriPhone growth, with the exception of China, assume an averageupgrade rate and a new subscriber increase similar to calendar 2011and the firm assumes "no multiple expansion despite a possibledividend." Apple expects to spend $7 billion on capital expenditures in fiscal2012, possibly implying fiscal year revenue of as much as $190billion. Morgan Stanley believes the "vast majority" of that willgo to equipment purchases for its suppliers that will help thecompany get a leg up on its competitors. The analyst did go on to outline potential risks factored into thebank's $405 Bear Case valuation. Lower carrier subsidies, increasedcompetition in low-price smartphone and tablet markets, competitionfrom Microsoft's Windows 8 in developed markets, lack of productroadmap visibility beyond 2013 after last year's management changeand multiple compression as growth slows were all named as risksfor Apple. We are high quality suppliers, our products such as Custom Timber Doors Manufacturer , Timber Composite Doors for oversee buyer. To know more, please visits Exterior Timber Doors.
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