Apple Stock: Analysts Bullish On Apple TV Growth By 2025

An analyst from Morgan Stanley has issued a bullish prediction for Apple’s (AAPL) services growth based on the success of Apple TV+. In a note issued on Tuesday, Katy L Huberty, a Managing Director in Research, predicted that Apple’s services segment would grow to 20% of the company’s business thanks to the forthcoming streaming service.

“With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25,” Huberty said in her note, according to CNBC.

Huberty’s prediction is predicated on both the presumed success of Apple TV+ when it launches on Nov. 1 and on the belief that iPhone once again becomes strong in the near future.

Morgan Stanley has upped its target price for Apple stock from $247 to $289, the highest price amongst analysts watching the company.

Shares of Apple on Wednesday gained 3.22, or 1.34%, to close at $243.18

When it launches, Apple TV+ will feature an offering of original TV series and, eventually, films. These initial offerings include the sci-fi series “See” with Jason Mamoa and the TV news drama “The Morning Show” starring Reese Witherspoon and Jennifer Aniston. The service will cost $4.99 a month and a free year of the service will be bundled with all new Apple product purchases.

“With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020,” Huberty further explained.