Morgan Stanley Cuts Apple Price Target to $355 Amid Product Roadmap Hype

Morgan Stanley's team led by analyst Erik Woodring has revised Apple's (AAPL.US) price target from $360 to $355, while maintaining an 'Overweight' rating.

The downgrade is not due to weakening demand but rather the new iPhone's pricing falling short of expectations, which affects both average selling price and gross margin assumptions.

Stronger shipment volumes, an upward revision to the Mac business, and service-price hikes are partially offsetting this impact, but still insufficient to justify a further upgrade to earnings forecast.

Morgan Stanley notes that Apple's product innovation roadmap under new CEO John Ternus will be 'the most exciting and impactful in recent memory,' potentially delivering four consecutive years of rising iPhone shipments since fiscal 2015.