Apple Inc. (AAPL)
Morningstar maintains its 12 month target for Apple at $240 per share, as Apple still anticipates record gross margins in the December quarter, demonstrating solid pricing power and product-mix benefits.
Morningstar continues to assign Apple a Wide Economic Moat, citing the strength of its integrated ecosystem, the central role of the iPhone, and benefits from in-house chip development, which supports innovation and cost efficiencies. The firm expects services growth in the low teens and ongoing shareholder returns backed by Apple’s strong balance sheet.
Risks for the stock, include Apple’s heavy reliance on China and Taiwan for its supply chain, regulatory scrutiny of the App Store, geopolitical tensions, and a slower pace of artificial intelligence feature deployment.
Overall, Morningstar is encouraged by Apple’s growth and profitability across both products and services, however, it notes that the stock still trades above its fair value estimates, and the current market valuation remains difficult to justify.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
