Morgan Stanley analyst Katy Huberty issued a “tactical’ buy recommendation on Apple shares this morning, an indication that she thinks the stock will rise in absolute terms over the next 45 days, with a confidence level of at least 80%.
The move, more or less the equivalent of an old-fashioned table-pounding affirmation of her bullish stance on the stock, comes in tandem with a release of the bullish results of a survey Morgan conducted that shows strong demand for for the iPhone.
“Apple is a must-own tech hardware stock into early 2012,” she writes, asserting that shares should get a lift from positive retail and supply chain data points over the holidays, Q4 earnings in January and anticipation of the iPad 3 launch will be near-term catalysts for the stock.
Huberty notes that her survey finds that U.S. demand for the iPhone in calendar Q4 is stronger than expected, and could reach 31-36 million units, above her current forecast of 30 million units; she also says that consumers expects to buy even more iPhone in the March quarter than in the December quarter, a sequential improvement not in the Street’s numbers (or hers); and she finds that tablet demand remains strong and that iPad sales should beat estimates next year.
Huberty says her survey finds that 30% of handset buyers in the U.S. plan to buy an iPhone, almost double the current 16% of handset owners who use iPhones today. On tablets, she notes that purchase intentions are more than triple the installed base, while pointing out that unit share is likely to fall slightly due to the Amazon Kindle Fire.
“A cheaper iPad could significantly increase demand, mostly from new adopters,” she adds. “If Apple lowered the price
of the cheapest iPad 2 by $100, 9% of respondents indicated they are very likely to purchase it, boosting overall US demand by 22 million units.”