Subscription services can power Apple back to $3 trillion and beyond - Morgan St...
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Subscription services can power Apple back to $3 trillion and beyond – Morgan Stanley
Thursday, July 21, 2022 10:29 am4 Comments
According to Morgan Stanley, Apple’s Services business is the engine that will power the company back to a market value of more than $3 trillion.
Subrat Patnaik for Bloomberg News:
While the market still tends to value [Apple] as a hardware company, shifting to a “lifetime value” based approach — which takes into account recurring revenues from services — suggests long-term upside to over $200 per share, or more than $3 trillion in market value, Morgan Stanley analysts wrote in a note.
“The Apple business model is shifting from one that maximizes hardware shipment growth to one that maximizes installed base monetization,” analysts led by Erik Woodring wrote.
Woodring, who rates Apple overweight, said that his lifetime value model assumes that Apple users will spend $2 per day on Apple products or services, a figure already achieved by US iPhone owners. The current stock price implies a material valuation discount to other tech platforms and software-as-a-service businesses, he said.
MacDailyNews Note: Apple on January 3rd became the first company in world history to hit the $3 trillion market capitalization milestone. Apple’s market value currently stands at $2.464 trillion, making it the most valuable company in the world.
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