Morgan Stanley has reiterated its Overweight recommendation on Apple Inc. and left its price target at $315.00 as investors prepare for the company’s quarterly report on Thursday. The stock is trading at $248.04 and, according to InvestingPro Fair Value metrics cited by analysts, appears modestly overvalued even as Apple posts a perfect Piotroski Score of 9 that points to robust financial health.
The firm’s near-term view is cautious. Morgan Stanley expects the stock to trade "sideways to modestly lower" in the immediate aftermath of the earnings release, despite its assessment that Wall Street underestimates the strength of the iPhone 17.
Fundamental projections underlying the call are mixed. Morgan Stanley models iPhone revenue at 4-8% above consensus for both the December and March quarters, yet identifies other inputs that could mute upward revisions to earnings estimates. The bank highlights that consensus operating-expense projections for the March quarter are roughly 7% too low relative to its own forecast, and it expects gross margins to come in approximately 30 basis points below Street expectations for the same period.
Beyond the March quarter, Morgan Stanley also flags downside risk to June-quarter EPS forecasts. The firm points to intensifying memory cost headwinds that are not fully reflected in consensus estimates, creating potential pressure on future margins. The bank additionally reminds investors of a historical pattern: Apple has tended to underperform the S&P by a median of 400 basis points in the first calendar quarter more than in any other quarter.
Analyst targets ahead of the report show a broad range, spanning from $205 to $350, underscoring divergent views among market participants. For investors seeking deeper analysis, InvestingPro subscribers have access to comprehensive research reports that the firm cites as context for differing forecasts and sensitivities around Apple’s results.
Other major broker commentary ahead of earnings has varied. Goldman Sachs maintained a Buy rating and a $320.00 target, interpreting a recent 5% pullback in the stock as an attractive entry point and projecting iPhone revenue growth of 9% in both fiscal 2026 and 2027. Goldman also models first-quarter fiscal 2026 earnings per share at $2.66, consistent with FactSet consensus.
UBS kept a Neutral stance with a $280.00 target, while noting strong demand signals for the iPhone 17 and estimating December 2025 sell-in volumes around 84.5-85.0 million units. KeyBanc reiterated a Sector Weight rating, describing the near-term risk/reward profile as neutral.
Product and market initiatives remain part of the narrative. Reports indicate Apple is developing an AI-enabled wearable pin featuring multiple cameras, a speaker, microphones, and wireless charging functionality. Separately, the company is in discussions with Mastercard and Visa about launching a digital payments service in India, contingent on approvals and with a phased rollout envisioned for 2026.
The confluence of upgraded device demand expectations, margin sensitivity, and cost pressures frames Morgan Stanley’s stance: upside from stronger iPhone sales is plausible, but cost and margin dynamics - especially memory costs and higher-than-expected operating expenses - could constrain near-term earnings revisions and share performance.
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