Morgan Stanley (NYSE:MS) Comments on iPhone 8 Release and Jeep Spin-off
Analysts from Morgan Stanley (NYSE:MS) recently commented on the expected delay in the ‘iPhone 8’ release and the likely spin-off of the successful Jeep brand from Fiat Chrysler.
Adam Jonas, an analyst at Morgan Stanley issued a research note on Monday stating that Jeep might be worth more than its parent company, Fiat Chrysler Automobiles NV (NYSE:FCAU). According to the note, Jeep is valued at 120% the market capitalization of Fiat Chrysler.
Another Morgan Stanley analyst, Katy Huberty, commented on the expected delay in the release of the ‘iPhone 8’ or ‘iPhone X,’ which is rumored to be in October instead of September. She said the late release date would be good for Apple Inc. (NASDAQ:AAPL) as its revenues and earnings would increase in the December and April quarters.
Katy adjusted her revenue estimates for Apple’s September quarter from $47.47 billion to $44.24 billion, while December revenues were raised to $90.36 billion from $85.69 billion.
The note from Jonas stated that Jeep should be spun-off from Fiat Chrysler given the recent increase in sales for Jeep branded vehicles. Jonas expects the iconic Jeep brand, which is respected globally for its off-road capabilities, to account for almost half of Fiat Chrysler’s overall sales in 2018.
The Jeep brand can sustain itself, which is evidence that the parent company might be holding back the popular brand from realizing its hidden value.
Fiat Chrysler’s CEO, Sergio Marchionne, is expected to leave the company in 2018, in order to focus on growing the Ferrari brand, which was successfully spun-off from Fiat Chrysler in late 2015. The plans to spin-off Jeep could tie in comfortably with Marchionne’s expected departure as he could dedicate his remaining time at the company to initiating the spin-off.
Morgan Stanley has also been performing extremely well recently having passed the Fed’s stress test indicating its strong financial position.
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