[ad_1]
Text size
Morgan Stanley says the recent drop in Apple shares is nothing more than a chance to push the stock higher.
Justin Sullivan / Getty Images
Apple
stock has lagged behind the overall market in recent weeks. An analyst says this offers a good buying opportunity.
Shares of the tech giant have fallen 16% since hitting a closing high of $ 142.95 on Jan.26. In comparison, the Nasdaq Composite fell less than 3% and the S&P 500 is up 2% over the same period. Apple stock slipped 1.8% in Friday’s last trading to $ 119.72.
The company hasn’t actually said anything about hardware in recent weeks, but there has been plenty of speculation that there may be a slowdown in demand for the iPhone. The Nikkei Asia press service reported earlier this week that Apple recently cut its production plans for the first half of the year by 20%, largely due to weak demand for the iPhone 12 mini, the low version of range of the 5G compatible iPhone range. announced last fall. Apple did not comment on the Nikkei report and did not respond to a Barron’s asked for comments on this earlier this week.
In a research note on Friday,
Morgan stanley
Hardware analyst Katy Huberty reiterated her overweight rating and price target of $ 164 on Apple stock, saying the recent sell-off was a buying opportunity and recent discussions on the chain’s developments. Taiwanese supplies were louder than substantial.
“Over the past two weeks we have seen reports of [other analysts] that Apple is cutting iPhone production, ”she wrote. “These reports have contributed to Apple’s recent underperformance and investors are wondering what we are hearing from the supply chain and how it affects our opinion of iPhone shipments this year.”
Huberty’s point of view is that the reports say nothing about the fundamental outlook. Checks by his colleagues in Asia reveal that build orders for iPhone 12 models – aside from the mini – and for older iPhone 11 models are increasing, not decreasing.
The analyst writes that the monthly sales reports of the company’s Taiwanese component suppliers accelerated in February for the fifth consecutive month. “At a high level, these data points read positively for sustained iPhone demand,” she says.
In addition, she notes that Apple continues to see strong demand for iPhones in China, with sales surpassing those of domestic smartphone suppliers. She estimates that based on government phone sales data, Apple’s iPhone sales in China rose 157% in January on an annual basis and 314% in February. Third-party data shows Apple’s share of the installed smartphone base reached 20.4% last month, up 85 basis points year-over-year, and marking the sixth consecutive month in a row. ‘increase in market share, she adds.
While Huberty concedes that there is growing evidence of weak demand for the iPhone 12 mini, overall she still believes the consensus estimates for fiscal 2021 iPhone sales are. too weak.
“We’ve heard anecdotally from our semiconductor colleagues that Apple’s memory purchases remain robust, which would defeat the narrative of major cuts to the iPhone,” she writes. “Putting all of this together, we think the news about the big iPhone production cuts is probably noisier in the supply chain than a material concern.”
Write to Eric J. Savitz at [email protected]
[ad_2]
Source link