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<\/div>\nMorgan Stanley has raised its AAPL price target to $419, suggesting that Apple upgrade and trade-in programs could help the company unlock an “iPhone pot of gold.”<\/p>\n
In a research note to investors seen by AppleInsider<\/em>, lead analyst Katy Huberty says that iPhone users are currently sitting on nearly $147 billion in trade-in value with the potential to “fund 41% of iPhone purchases over the next three years.”<\/p>\n<\/div>\n Currently, about 48% of consumers take advantage of Apple trade-in programs<\/a>. But a Morgan Stanley AlphaWise consumer survey of 10,000 users in the U.S., U.K., Germany, China and India suggests that 77% of consumers plans on trading in a device by 2021.<\/p>\n<\/div>\n “Improving iPhone affordability combined with an aging installed base, broader product line-up and compelling new technology cause us to raise our FY21 and FY22 iPhone shipment forecast by 6% and 3%, respectively,” Huberty wrote.<\/p>\n<\/div>\n The accelerating adoption of the iPhone trade-in program, which could increase to 64% in 2022 and 77% by 2025, could help drive Apple revenues over the long-term. The program itself is still nascent, since the current trade-in campaign was only announced in January 2019.<\/p>\n<\/div>\n Another factor that plays a part in Huberty’s forecast includes the strong resale value of the iPhone, which the analyst calls a “key differentiator.” Apple is also setting on an iPhone replacement cycle of 4.1 years, which could drive adoption of the 5G “iPhone 12<\/a>” models later in 2020.<\/p>\n<\/div>\n Although iPhones hold their value much better than Android devices, Huberty says, this year’s “iPhone 12” models may not be much different in price than the “iPhone 11<\/a>” lineup.<\/p>\n<\/div>\n The increasing “sustainability” movement across the globe could also help bump up the usage of Apple’s trade-in program, since the company regularly touts how it refurbishes and recycles devices that have been traded in. In 2019, Apple’s programs diverted 322,000 metric tons of waste<\/a> from landfills, for example.<\/p>\n<\/div>\n As a result of these factors, along with the adoption of new technologies and features in upcoming iPhones, Huberty says that Apple has a competitive pricing advantage that “was not previously embedded” in Morgan Stanley’s forecast.<\/p>\n<\/div>\n The analyst is raising her 2021 iPhone shipment prediction to 218 million units, up from 205.2 million. Huberty also ups her iPhone revenue forecast for that year to $163.3 billion, up from $157.8 billion.<\/p>\n<\/div>\n Morgan Stanley has also increased its June quarter product estimates on better-than-expected supply and demand data over the past eight weeks.<\/p>\n<\/div>\n Huberty’s 12-month AAPL price target is now $419, up from $340. That’s based on a 5.5x enterprise value-to-sales (EV\/Sales) multiple and a 26.5x target price-to-earnings (P\/E) multiple.<\/p>\n<\/div>\n Shares of AAPL are currently trading at $392.93 on the NASDAQ. That is up 2.35% on the day and is currently the company’s highest share price to date.<\/p>\n<\/div>\n In a separate but similarly positive research note<\/a>, analysts from Wedbush have upped their Apple price target to $450. They also cite expected demand from users trading in older devices.<\/p>\n<\/div>\n<\/div>\n Tags:<\/b> Mike Peterson <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"\n\n\n\n\n\n\n![\"Credit:](\"https:\/\/photos5.appleinsider.com\/gallery\/36646-68357-Morgan-Stanley-Trade-Ins-xl.jpg\")
<\/div>\nCredit: Morgan Stanley<\/span><\/div>\n<\/div>\n\n\n\n\n\n\nSee Campaign: <\/strong>https:\/\/appleinsider.com\/articles\/19\/11\/14\/how-to-use-apples-trade-in-program-to-get-a-discounted-iphone<\/a>
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Mike Peterson <\/p>\n
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Morgan Stanley has raised its AAPL price target to $419, suggesting that Apple upgrade and trade-in programs could help the company unlock an “iPhone pot of gold.” In a research note to investors seen by AppleInsider, lead analyst Katy Huberty says that iPhone users are currently sitting on nearly $147 billion in trade-in value with … Continue reading Morgan Stanely sees ‘iPhone pot of gold’ driving AAPL to $419 per share<\/span><\/a> Continue Reading