Apple’s (NASDAQ:AAPL) current margin and profitability problems are set to end soon and point at the imminent arrival of a new iPhone 5S, Morgan Stanley analyst Katy Huberty has said. Huberty also reiterated an Overweight rating on Apple shares as well as a $630 price target.
According to the analyst, Apple’s gross margins — one of the biggest current points of concern for the company’s shareholders — will start rising significantly in the second half of the year, pulling the share price along. The analyst made the assertion after looking at Apple’s latest filing with the U.S. Securities and Exchange Commission. Margin “volatility does not appear entirely structural,” but cyclical and related to a forthcoming iPhone 5S, she wrote in a note to investors on Monday.