Morgan Stanley Raises Apple Target to $315 on 2027 Earnings Optimism
New York, Tuesday, 23 December 2025.
Morgan Stanley raised Apple’s price target to $315, identifying the stock as a top pick for 2026. The upgrade reflects strong fiscal 2027 earnings forecasts and anticipation of a foldable iPhone.
Analyst Conviction and Fiscal Outlook
In a decisive move solidifying its confidence in the technology sector, Morgan Stanley has reaffirmed Apple Inc. (NASDAQ: AAPL) as a top pick, explicitly naming the company to its “core 5 Overweights” list for 2026 [2]. The investment bank raised its price target for the tech giant to $315 from $305, signaling a potential upside of approximately 16.249% from the recent trading price of $270.97 [1][2][4]. This upward revision is underpinned by a valuation multiple of 32 times the expected earnings per share (EPS) for fiscal 2027, suggesting that institutional investors see significant long-term value in Apple’s earnings power despite broader market fluctuations [1].
Detailed Earnings Revisions
The analysis, led by Erik Woodring, delves deep into Apple’s financial trajectory, specifically adjusting fiscal 2027 expectations to reflect a more robust earnings profile. Woodring increased his FY27 EPS forecast to $9.83, up from a previous estimate of $9.55 [2]. However, this optimism is tempered by a realistic assessment of input costs; the analyst cut product gross margin assumptions for the same period by approximately 160 basis points [2]. This adjustment accounts for higher memory input costs, yet the firm believes the increase in overall earnings power will more than offset these margin pressures, maintaining a constructive backdrop for the stock through 2026 [2].
Hardware Catalysts on the Horizon
Beyond the balance sheet, anticipation is building around Apple’s hardware roadmap, which acts as a critical driver for future revenue streams. Reports indicate that Apple is developing a foldable iPhone, with a launch expected in the fall of 2026 [3]. Industry analyst Ming-Chi Kuo projects that shipments for this new form factor will start modestly, ranging between 3 million and 5 million units in 2026, before surging to approximately 20 million units in 2027 [3]. This innovation is poised to reinvigorate the smartphone segment, where Apple maintains high royalty revenue exposure [2][3].
Financial Footing and Market Context
Apple’s current market standing remains formidable as it heads into 2026. The company recently reported fiscal fourth-quarter 2025 revenue of $102.5 billion, marking a 7.9% year-over-year increase, while earnings per share rose to $1.85 [3]. With a market capitalization standing at $4.004 trillion, Apple continues to command a premium valuation, trading at a price-to-earnings ratio of 36 [4]. As investors look toward the next earnings release scheduled for January 29, 2026, the combination of stable iPhone shipment expectations and the looming introduction of foldable technology provides a compelling narrative for the raised price target [1][4].