Morgan Stanley maintains AAPL as a buy, giving four reasons for expecting stock to climb

Following Bank of America Merrill Lynch yesterday giving six reasons for downgrading AAPL stock, Morgan Stanley has responded today with four reasons it continues to rate the stock a Buy, reports Business Insider.

In a note to clients on Thursday, Morgan Stanley’s Katy Huberty maintained an “Overweight” rating and $155 price target on the stock, arguing that the company will not see a similar stock meltdown to what was experienced after a huge run-up in 2012. 

While acknowledging that supply may be catching up with demand, leading to supply chain reports of seemingly weaker sales, Huberty says there are four reasons the stock is likely to climb.

  1. Gross margins are improving, not deteriorating, as the company heads into the next iPhone cycle.
  2. There’s low institutional ownership of the stock. 
  3. Apple has a more competitive product line-up and a “stickier” ecosystem against Android.
  4. There’s a more robust product and services roadmap.

Addressing concerns about the impact the weak Chinese economy may have on Apple, Huberty says that smartphones costing more than $300 each have been increasing their market share, meaning that Apple is well placed to continue to grow its business in the country.