Morgan Stanley analyst Katy Huberty today raised its service revenue forecast for Apple through the 2022 fiscal year.
In a research note shared with MacRumors, Huberty said that stronger license revenues are the main driver of the increased estimates, including an acceleration in search traffic-related payments Apple receives from Google. New York Times last year reported that Apple receives an estimated $ 8-12 billion per year in exchange for making Google the default search engine on devices such as the iPhone and iPad.
“After strong App Store results in March and an analysis of the key drivers in Apple’s Licensing and other segment, we are already increasing revenue estimates FY21 and FY22 Services across the street by 3% and 5% respectively, and are increasingly convinced that consensus services forecasts the next The 2+ years are too low, “Huberty wrote.
Despite the positive outlook for Apple’s services, Huberty lowered its 12-month price target for Apple to $ 155 from $ 164 per share.
“However, several compression over the past two months, mainly on Apple’s colleagues with higher growth in services, have more than offset our higher revenue and earnings estimates, leading to our new share-based price target of $ 156, or 33x FY22 EPS, down from $ 164 previously, ”Huberty wrote.
Apple’s service portfolio includes the App Store, Apple Music, Apple TV +, Apple News +, Apple Fitness +, Apple Arcade, iCloud and more.