Apple Stock Prices: Morgan Stanley’s Katy Huberty on Apple Margins

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsApple Stock Prices: There has been a lot of talk recently regarding Apple Inc. (NASDAQ:AAPL)’s lower stock price. More specifically, most people are trying to pinpoint the cause.

According to a recent article by AppleInsider, Morgan Stanley’s Katy Huberty has some thoughts on this.

Before we go any further, let’s make note that Morgan Stanley has kept its overweight rating for the tech giant despite lowering its price target to $630.

Here is some information from the piece, explaining Huberty’s position:

“Morgan Stanley’s Katy Huberty pointed out on Monday that Apple’s quarterly stock performance and gross margin both peaked in March of 2012. Thereafter, capital equipment investments in preparation for the launch of the iPhone 5 and higher NAND flash prices knocked margins down 900 base points.”

“Huberty expects that Apple will follow its previous patterns and release an “iPhone 5S” that will not likely require much in the way of significant hardware changes. She also expects Apple to grab better deals on NAND components going forward, a trend possibly foreshadowed by the release of a 128-gigabyte iPad.”

At this point, it appears that she is not teaming with pessimistic Apple Inc. (NASDAQ:AAPL) investors at this point but instead looking on the bright side. With that in mind, “she believes that lower capital equipment purchases and potentially more favorable NAND flash prices could result in improved margins toward the end of 2013.”

It will be interesting to see if Huberty is right in believing that the same cycle will take place once again in 2013.

The article goes on to add the following:

“As evidence, Huberty pointed to Apple’s 10-Q filing, in which the company revealed that its purchase commitments for the current quarter are just $904 million. That compares to $4.5 billion just two quarters ago, when the company invested in new in-cell touch displays for the iPhone 5 launch.”

“For its part, Apple’s own guidance projects that the company’s fiscal year 2013 gross margin will fall short of its peak of 43.9 percent in fiscal year 2012. Morgan Stanley’s models call for Apple to see gross margins of 38.7 percent in fiscal 2013.”

Do you agree with Huberty’s take on Apple Inc. (NASDAQ:AAPL) margins or do you have other ideas of what 2013 will bring? Be sure to share your thoughts in the comment section below.

Check back here for more updates on Apple Stock Prices.

DISCLOSURE: I have no positions in any stock mentioned.

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