US Department of Justice sues Apple for anti-trust violations, but Morningstar maintains positive outlook

From Morningstar:

The US Department of Justice is suing Apple for anti-trust violations, claiming Apple’s business practices unfairly stifle market innovation. Morningstar maintains Apple’s fair value estimate at $160 and Medium Uncertainty Rating, expecting minimal impact from the lawsuit on Apple’s business or Moat. Apple denies any wrongdoing and vows to fight the suit.

The lawsuit brought by the Department of Justice targets Apple’s core strategy of ecosystem control, which includes the App Store, Apple Pay, iMessage, and the Apple Watch. Analysts foresee the possibility of Apple opening up parts of its ecosystem to comply with regulations and changing priorities. Despite the lawsuit, Morningstar believes users will still choose Apple’s user-friendly ecosystem.

Morningstar’s key metrics for Apple include a fair value estimate of $160, a Morningstar Rating of 3 stars, a Wide Morningstar Economic Moat Rating, and a Medium Morningstar Uncertainty Rating. The suit against Apple mentions various aspects of its ecosystem and could lead to some changes in Apple’s current business practices. Morningstar predicts that users will continue to prefer Apple’s closed ecosystem, and any impact from the lawsuit is expected to be minimal.



Read more at Morningstar: Lawsuit Drama Doesn’t Change Our View of Apple…