New Apple CEO John Ternus unveils the iPhone 18 lineup and a rumored first foldable iPhone at a Sept. 9 event, following a fiscal third quarter in which revenue rose 16% and iPhone sales jumped 22%. Morgan Stanley rates the stock a buy with $14 billion in added revenue expected from the foldable phone, even as Apple trades at 37 times earnings.
Ternus era opens with Sept. 9 launch
John Ternus became Apple's CEO on Sept. 1, replacing Tim Cook, who ran the company for 15 years. Before Cook, founder Steve Jobs had led Apple since the 1990s.
At an event called Surprise and Shine, Ternus is set to introduce a new iPhone 18 lineup, including Pro and Pro Max models, along with a rumored first foldable phone that insider sites reportedly call the iPhone Ultra. Apple Watches, MacBooks, iPads, AirPods, and a new Home Hub are also expected at the show. Apple stock has climbed about 8% over the past month, up roughly 30% since April 1 and about 21% year to date heading into the launch.
iPhone 18 costs rise as foldable phone nears
Apple's June-ended quarter saw revenue rise 16% year over year to nearly $109 billion, with earnings up 27% to $29.4 billion and iPhone sales up 22% to $54.2 billion. Growth is expected to slow, however, as September-quarter sales growth is projected in the 9% to 11% range, partly due to a 2.5 percentage-point currency headwind, with gross margin seen at 47% to 48%, down from 50.1% in the June quarter.
The new foldable phone and iPhone 18 Pro and Pro Max models should instead lift the December quarter. Experts anticipate the iPhone 18 lineup will be priced 10% to 20% above the iPhone 17, partly due to higher memory costs, while the foldable model will likely retail above $2,000.
Morgan Stanley sees upside despite the stock's valuation
Morgan Stanley estimates the foldable phone alone could generate $14 billion in revenue in the December quarter and rates Apple stock a buy with a $360 price target, about 9% above the current $330 share price. Apple's market capitalization stood at $4.8 trillion, with shares trading at 37 times earnings.
That valuation could weigh on the stock if September-quarter results disappoint in October, a pattern the article's author describes as a possible "sell the news" reaction before the new product lineup reaches stores.
Source: The Motley Fool
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