If you’re interested in computer hardware stocks, you should know that after Morgan Stanley raised its price target on Apple, Inc. (NASDAQ:$AAPL) on Tuesday, shares of the technology giant inched up less than 0.1% in morning trade.
Why did the firm raise its price target? Well, Morgan Stanley cited an improved profit outlook on the back of that higher average selling prices (ASPs). Analyst Katy Huberty echoed her overweight rating on Apple, but increased her price target from $182 to $194. This is significant as this is more than 20% above current levels.
Huberty stated that the main takeaway from Apple’s product event last week is that average selling prices were boosted across the product line. As a result, Huberty increased her fiscal 2018 EPS forecast from $11.80 to $12.60. As a point of reference, the FactSet consensus is $10.89.
In a note to clients, Huberty wrote that “Apple is an aspirational brand offering high quality, innovative products at a premium price.” She added, “As a result, the company escapes the typical trend of declining prices that drive demand for other devices.”
Over the course of the past three months, AAPL stock has rallied 8.5%.
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