Morgan Stanley increased its price target for Apple (NASDAQ:AAPL) shares to $298 from $240, maintaining an Overweight rating, after observing a stronger-than-anticipated start to the iPhone 17 cycle.
“The iPhone 17 cycle is modestly stronger than we originally expected,” the Morgan Stanley analysts said, noting that while “the market has already priced this in,” there remains “a positive bias to T12M estimates, and the early drivers of iPhone 17 strength get us more excited about the iPhone 18 cycle.”
The bank boosted its fiscal 2026 iPhone revenue projection by 4%, reflecting “3% higher units and 1% higher ASPs,” and added that “a build increase is imminent, driven by demand strength from the iPhone 17 base, Pro and Pro Max models.”
Morgan Stanley emphasized that “the key driver of a stronger iPhone 17 cycle — an aged iPhone installed base in need of upgrades — combined with the first-ever Foldable iPhone and 6 total new iPhone launches next cycle … supports high-single digit Y/Y iPhone revenue growth extending into FY27, even before we make any assumptions around AI.”
Regarding earnings, the analysts stated: “As a result of these factors, we are raising our FY26 and FY27 EPS by 2% and 6%, respectively, and increasing our price target to $298, or 32x our new FY27 EPS of $9.30, 6% above Consensus.”
Morgan Stanley’s more optimistic bull case sets a target of $376, which “embeds over 270m iPhone shipments and $10.16 of EPS, which is achievable if Foldables and AI catalyze even stronger demand.”
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