Recent headlines are Apple (AAPL) Massive valuations have been reset as their market cap fell by $1 trillion over the past year.
Apple’s predicament among tech giants is certainly not unique, and all heavy hitters have taken a serious dip in the past year. In fact, it performs relatively well compared to some others. More specifically, the bear case for Apple, aside from broader macro concerns about consumers cutting back on spending, has recently been driven by major supply chain issues related to Covid-induced shutdowns in China. It’s getting worse.
Wedbush analyst Daniel Ives said his Asian supply chain checks were “clearly mixed,” and that given the soft consumer environment, Apple will likely launch more Macs, iPads, and smartphones in the next few quarters. It appears to be “reducing” some orders for AirPods, it said.
“That said, core demand for the iPhone 14 Pro appears to be more stable than feared, seen in November/December due to zero Covid lockdowns in China. We’re getting out of the supply chain abyss/Foxconn.Some iPhone orders may be cut in March and June (iPhone 14 Plus continues to strike out heavily), but the overall demand environment , believes the Street is more resilient than expected, and therefore believes there is a ton of bad news rolling into the inventory.”
Supply chain issues have resulted in about 8-10 million iPhones being “pushed out” since the December quarter. But it should prove beneficial for the March quarter, and Ives sees no indication that demand will “shift into 2023, rather than evaporate.”
The fact of the matter is that the “flagship” iPhone 15 will also be released in the fall, and there are over 200 million iPhone units that haven’t been upgraded in the last four years. On top of that, the “long-awaited” Apple glasses could be unveiled this summer, and Apple remains his Ives “favorite tech name.”
That said, given the “uncertain environment,” Ives has lowered his price target from $200 to $175, suggesting a 35% gain in the stock over the next few months. Ives’ rating remains Outperform (that is, Buy). (To see Ives’ achievements, click here)
Street’s average target is only slightly higher. At $176.70, the figure shows the stock has room to grow by 37% over the next year. Overall, the strong buy consensus rating for this stock is based on 22 buys and he holds 5. (See Apple stock predictions on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. This content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.