Apple’s App Store Growth Fuels Positive Outlook Despite Minor Risks

Morgan Stanley analyst Erik Woodring maintained a Buy rating on Apple (AAPL – Research Report) today and set a price target of $235.00.

Erik Woodring’s rating is based on the recent performance and growth prospects of Apple’s App Store. The App Store experienced a notable 10% year-over-year growth in May, which was an improvement from the previous month’s growth rate. This acceleration in revenue and monetization indicates a positive trend for Apple’s services segment, suggesting potential upside in their quarterly revenue forecasts.
Despite some concerns highlighted by a survey indicating that a portion of iPhone users might bypass the App Store’s in-app purchase system, the overall financial outlook remains strong. The survey results suggest a manageable risk to Apple’s earnings per share, with only a small percentage potentially affected. This combination of robust growth and limited downside risk underpins Woodring’s Buy rating for Apple.

In another report released on June 3, J.P. Morgan also reiterated a Buy rating on the stock with a $240.00 price target.

Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AAPL in relation to earlier this year.