Morgan Stanley Trims Apple Price Target Amid Memory Cost Pressure

Morgan Stanley has adjusted its outlook on Apple's stock performance due to changes in product pricing and memory costs. The bank now expects revenue growth, but not at the pace previously anticipated. Despite this, Morgan Stanley maintains a positive view on Apple's multi-year product setup under new CEO John Ternus.

The analyst Erik Woodring noted that the next two years of innovation will be 'consequential' and lead to four consecutive years of iPhone unit growth since 2015. However, lower-than-expected iPhone prices by $100 instead of the expected $150-$200 increase has put pressure on margins.

Morgan Stanley still expects Apple to earn around $10 per share in fiscal 2027 and nearly $11 in fiscal 2028. The bank trimmed its price target to $355 from $360, while maintaining an Overweight rating. Woodring stated that stronger unit expectations will offset weaker pricing to some extent.