NEW YORK (TheStreet) -- Shares of Apple Inc (AAPL) were moving higher by 0.91% to $131.24 in late morning trading Thursday, after analysts at Morgan Stanley revised their iPhone and Apple Watch estimates this morning.
Analysts at the firm said their checks indicate June quarter iPhone demand is tracking ahead of Wall Street expectations, and Watch demand has risen following the launch.
For the Apple Watch, Morgan Stanley raised its base case estimate to 36 million units from 30 million units in the first 12 months.
The firm raised its June quarter iPhone unit estimate to 50 million from 46 million. It also upped its fiscal 2015 unit estimate to 240 million, and its fiscal year 2016 unit estimate to 249 million.
Morgan Stanley reiterated its "overweight" rating with a $166 price target on Apple shares.
In addition, Cantor Fitzgerald analyst Brian White said the strong Apple iPhone demand can largely be attributed to China, where 3G and 4G smartphone subscribers increased by 39% compared to a year ago.
Earlier this week, billionaire investor Carl Icahn said Apple remains dramatically undervalued, and is worth almost double the current price, according to CNBC.
In a letter to Apple CEO Tim Cook, Icahn wrote that he values Apple shares at $240. Icahn also called for accelerated buybacks, CNBC added.
The investor said his team believes that Apple is poised to enter and "dominate" two new product categories, television and automobile, CNBC reported.
Apple designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions, and applications.
The company is based in Cupertino, Calif.
Insight from TheStreet's Research Team:
Apple is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Here's a snippet of what Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS wrote about the stock:
In the letter, Icahn highlights Apple's valuation discrepancy vs. the broader market, with shares trading at a 60% discount to the S&P 500 (11.9x 2016 earnings vs. the index's 17.4x average). He argues that market participants -- including institutional investors, sell-side analysts and financial media -- are failing to value Apple's net cash separately from its business, adjust earnings to reflect the company's real tax rate, validate the growth prospects of newly entered categories, or appreciate the company's ability to maintain premium pricing and elevated margins.
From a category perspective, Icahn believes Apple is well positioned to disrupt the TV and automobile markets, which he expects Apple to enter in 2016 and 2020, respectively. He also expressed confidence in Apple's core iPhone business, which he anticipates will continue taking market share from competitors, particularly in emerging markets.
- Jim Cramer and Jack Mohr, ' Our Takeaways from Icahn's Letter to Apple' originally published 5/18/2015 on ActionAlertsPLUS.com.
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Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
You can view the full analysis from the report here: AAPL Ratings Report