EFTA02603627

From: Richard Kahn Sent: Wednesday, August 1, 2018 2:32 AM To: Jeffrey Epstein Subject: Fwd: Apple, Inc.: A Clean Beat on the Path to $1 Trillion Rich=rd Kahn HBRK Associates Inc. 575 Lexington Avenue, 4th Floor<=div> New York, NY 10022 Begin forwarded m=ssage: From: Date: July 31, 2018 at 10:24:40 PM EDT To: Subject: Apple, Inc.: A Clean Beat on the Path to $1 Trillion=/b> Reply-To <=td> <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> &nb=p; Katy L. Huberty= CFA — Morgan Stanley August 1, 2018 2:18 AM =GMT We see more=upside than downside risk to the upcoming iPhone product cycle and a buildi=g Services narrative. Even if device revenue growth slows, Services and We=rables can pick up the slack, delivering 5% revenue and 14% EPS growth annu=lly through CY20, supporting our SOTP-driven $232 PT. Estimates move higher on iPhone ASPs, Services, Wearables. F3Q revenue (+17%=Y/Y) beat expectations largely on iPhone ASPs (+20%) and Services (+31% re=orted, 28% normalized) with wearables (+37% Y/Y) maintaining momentum from p=evious quarters. Sept Q guidance also topped expectations and reflects a=similar mid teens revenue growth rate EFTA_R1_01792979 EFTA02603627 for the overall company despite the m=re difficult compare from a year ago. The combination of a strong macro e=vironment and an increasingly engaged customer base led to double digit gro=th in all regions on a sell-in basis during the June quarter. After flowin= through the stronger results - namely higher F4Q revenue, slightly offset b= higher OpEx, plus stronger LT Services and wearables growth - our FY18 EPS=increases to $11.75 (from $11.45) and FY19 EPS increases to $14.12 (from $1=.00). Our $232 SOTP-driven price target is unchanged after raising our rev=nue forecast modestly, shifting to CY19, and considering recent multiple co=pression at Services peers (Facebook, Tencent, Alibaba). What we learned f=om Apple's F3Q18 earnings:(+) Services narrative gains momentum with refere=ces to strong pipeline of new services. Services revenue grew 31% Y/Y, ab=ve consensus expectations of 26% Y/Y and more in-line with our 32% Y/Y fore=ast. However, backing out a $236M one-time legal benefit implies 28% Y/Y no=malized growth. In the June quarter, paid subscriptions to Apple Services t=pped 300M users (+60% Y/Y) and the App Store, AppleCare, Apple Music, iClou= and Apple Pay all set new June quarterly revenue records. For the App Stor=, results were even more impressive when considering the Chinese government=reportedly slowed the process o This alert i= sent from: =You received this because you requested that you receive content and report= from: APPLE INC. =Please contact your FA if you want to unsubscribe from the alerts. <http://www.=organstanley.com/img/cs/spacer.gif> <http://www.=organstanley.com/img/cs/spacer.gif> <http://www.=organstanley.com/img/cs/spacer.gif> <http://www.=organstanley.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.morganstan=ey.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs=spacer.gif> chttp://www.morganstanley.com/img/cs=spacer.gif> <http://www.morganstanley.com/img/cs=spacer.gif> Disclosures: Please see the full report for risks, dis=losures and other important information. Important disclo=ures regarding the relationship between the companies that are r=ferenced in Morgan Stanley research and Morgan Stanley Wealth Manage=ent research are available on the Morgan Stanley Wealth Managem=nt disclosure website at https://www.morganstanley.com/online/researchdisclosures <https://www.morganstanley.com/online/researchdis=losures> . Morgan Stanley Wealth Management Not Acting as Municipal Ad=isor Morgan Stanley Wealth Management is not acting as a municip=l advisor to any municipal entity or obligated person within the mean=ng of Section 15B of the Securities Exchange Act (the "Municipal A=visor Rule") and the opinions or views contained herein are not i=tended to be, and do not constitute, advice within the meaning of the=Municipal Advisor Rule. 2 EFTA_R1_01792980 EFTA02603628 Copyright The copyright in materials provided by Morgan Stanley is owned by Morgan Sta=ley & Co. LLC. Morgan Stanley Wealth Management is the trade name of M=rgan Stanley Smith Barney LLC, a registered broker-dealer in the=United States. &=bsp; © 2018 Morgan Stanley Smith Barney LL=. 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