Apple's long-term positives outweigh rare earnings miss, Morgan Stanley says

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Apple's top and bottom line misses don't change the underlying bullish thesis for the company, Morgan Stanley analysts said.

noting both accelerated growth in iPhone installed base and a continued upward margin trajectory as longer-term upside which will ensure "the Apple flywheel keeps spinning."

Morgan Stanley reiterated its Top Pick rating for Apple. The company has managed to navigate a broader tech downturn with considerable success and is one of the few tech companies that hasIt's that same discipline that helps Morgan Stanley analysts maintain a bullish outlook on Apple, which guided to a Mar. 2023 gross margin ranging from 43.5 to 44.5%, according to the note.

"We believe Apple's ability to post the highest gross margin in a decade despite seeing revenue decline Y/Y is impressive, and moving forward, we expect gross margins to improve as mix, FX, commodities, and logistics all work in Apple's favor through the rest of 2023 and into FY24," Morgan Stanley's note said.

Apple's user spend levels are also keeping Morgan Stanley bullish, proof that "the underlying drivers of Apple's model remain robust." Investors have apparently embraced Morgan Stanley's appraisal of Apple's durability as a long-term investment. Apple shares were off by a little over 2% this morning despite the sales miss, recouping losses from a 4% drop Thursday night. The company also reported misses on the top and bottom lines, beating analyst expectations only in iPad and services revenue.

 

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Yeah because they cant sell. AAPL wont have growth for a couple/few years.

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