Morgan Stanley: Apple stock is top pick

Morgan Stanley analyst Erik Woodring in a research note Monday remains bullish on Apple, which is expected to report its September quarter results next week, naming it its top pick.

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Eric J. Savitz for Barron’s:

Woodring reduced its 2023 earnings estimates for the hardware group by 5% -10%, cutting its price targets by an average of 15%, “to reflect high risk factors.” He notes that the cuts are steeper for companies with exposure to consumer hardware and PCs, including Cricut, HP Inc, Logitech International, Seagate Technology and Xero, and smaller for Apple, CDW, Vivint Smart Home and SmartRent.

Woodring advises investors to maintain a “quality bias” and keeps Apple as his first choice … he doesn’t see the company as entirely immune to an environment where consumer spending weakens, but adds that its controls on the channels note that “demand has held up better than expected in recent months”.

Woodring raised his estimates for Apple’s September and December quarters, with the strength of demand for iPhones, iPads and Macs more than compensating for weakness in wearables and services. His estimates for both quarters are now slightly above Street’s consensus, but his new forecast for the March quarter is below the consensus. Woodring reduces his Apple stock target to $ 177, from $ 180.

MacDailyNews takes: Smart choice.

Apple iPhone customers are the most recession-proof smartphone buyers. – MacDailyNews, September 7, 2022

The same goes for Mac, Apple Watch, and iPad customers.

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