AAPL Morgan Stanley analyst Erik Woodring is assuming coverage of Apple, stating that he believes a more pronounced shift to a subscription-like model could add roughly $1 trillion to Apple’s current market capitalization. Apple’s industry-leading retention rates and expanding ecosystem of hardware and services has already created one of the world’s most valuable technology platforms, but the market continues to value Apple more like a traditional technology hardware platform, said Woodring. He sees Apple’s 2022 year-end installed base disclosures to be provided in January 2023 as a key catalyst for the market to begin pricing in a model transformation, but a formal shift to a pure subscription model would “perhaps have an even greater valuation impact,” the analyst said. Based on what he considers “conservative assumptions,” he sees long-term valuation upside to just over $200 per share, or a greater than $3 trillion market cap, which Woodring notes is over 30% higher than Apple’s current market cap. He maintains an Overweight rating and $180 price target on Apple shares.
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At least you know what to buy. I suspect Warren added to his Apple holdings with the recent drawdown.
Nobody could understand why he added to an outsized position in April…given the alternatives at the time. This could be on reason adding to an elephant.