EFTA02601863

From: Richard Kahn Sent: Monday, July 23, 2018 11:53 PM To: Jeffrey Epstein Subject: Fwd: Apple, Inc.: We expect an In-Line Quarter; All Eyes on Services & Fall iPhone Launch Richard Kahn HBRK Associates =nc. 575 Lexington =venue, 4th Floor New York, NY =0022 Begin forwarded message: From: =/b>"Morgan Stanley" Subject: =/b>Apple, Inc.: We =xpect an In-Line Quarter; All Eyes on Services & Fall iPhone =aunch Date: =/b>July 23, 2018 at 7:52:20 PM =DT To: =/b>< Reply-To: =/t <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> Wealth =anagement <http://www.morganstanley.comh <http://www.morganstanley.com/img/cs/spacer.gif> Apple, Inc.: We =xpect an In-Line Quarter; All Eyes on Services & Fall iPhone =aunch <http://www.morganstanley.com/img/cs/spacer.gif> EFTA_R1_01789805 EFTA02601863 Katy L. Huberty, CFA =E2 Morgan Stanley July =3, 2018 11:45 PM GMT We slightly tweak ests into =he quarter, most notably raising June Q iPhone ests by 2% to 39.8M =nits. Expect Services growth above cons. at 30%+ but anticipate =nvestors remain focused on Sept Q guidance and fall iPhone launch. =arking our SOTP-driven PT to market drives PT to $232 (from $214). We expect limited follow through from earnings, with Sept =Phone launch the next big stock catalyst. We expect Apple to report an =n-line June quarter and provide a slightly weaker than consensus =eptember quarter outlook due to a possible October launch of the 6.1" =CD iPhone. We currently see no delay in the ramp of Apple's upcoming =lagship 5.8" or 6.5" OLED iPhones, however suspected issues with LED =acklight leakage have caused a 1 month delay in mass production of the =.1" LCD iPhone, although this is down from a 6 week delay baked into =he original production forecast, according to suppliers. Nevertheless, =11 three new iPhone models are expected to be announced in September, =ith our Greater China Technology Hardware team still forecasting 90M =ew iPhone builds in C2H18, up slightly from 89M in C2H17. We make minor =djustments to June quarter estimates (iPhone units up 800k, Mac units =p 150k, iPad units down 500k, Services growth to 32% Y/Y, from 33%) but =therwise keep our FY18 and FY19 device (iPhone, iPad, Mac) forecasts =nchanged, while slightly tweaking Services growth on the margin (1 =amp; 2). Net, we now model FY18e EPS of $11.45 (up from $11.41 prior) =nd FY19e EPS of $14.00 (up from $13.76 prior). With the summer months =ypically viewed as a product transition period, we look to the =eptember launch of the new iPhone models as the next meaningful stock =atalyst but note that 1) a push out of the iPhone launch date, 2) =eaningfully weaker Services data points, or 3) increasingly heated =rade rhetoric between the US and China present the greatest risks to =hares over the next 3 months. We expect Services results to be the =ocal point of June quarter report with This alert is sent from: Andrew Atlas, You received this because you requested =hat you receive content and reports from: APPLE =NC. Please contact your FA if you want to unsubscribe from the =lerts. <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> Disclosures: Please see =he full report for risks, disclosures and other important =nformation. Important disclosures regarding the =elationship between the companies that are referenced in Morgan Stanley =esearch and Morgan Stanley Wealth Management research are available on =he Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures. Morgan Stanley Wealth Management Not Acting as Municipal =dvisor Morgan Stanley Wealth Management is not acting as a municipal =dvisor to any municipal entity or obligated person within the meaning =f Section 158 of the Securities 2 EFTA_R1_01789806 EFTA02601864 Exchange Act (the "Municipal Advisor =ule") and the opinions or views contained herein are not intended to =e, and do not constitute, advice within the meaning of the Municipal =dvisor Rule. Copyright The =opyright in materials provided by Morgan Stanley is owned by Morgan =tanley & Co. LLC. Morgan Stanley Wealth Management is the trade =ame of Morgan Stanley Smith Barney LLC, a registered broker-dealer in =he United States. © 2018 Morgan Stanley Smith Barney LLC. Member =IPC. <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> 3 EFTA_R1_01789807 EFTA02601865