Trump's new tariffs would reduce Apple's revenue – BofA

According to Bank of America badysts Merrill Lynch, a new series of US tariffs could bring another blow to the iPhone and reduce the financial results of Apple.

President Donald Trump announced Thursday that the US government plans to impose a 10% tariff on Chinese goods worth $ 300 billion starting next month. Apple, whose drop of 2.2% Thursday has exceeded that of 0.9% for the S & P 500 in the broad sense.

Apple, which fell 2.9% early Friday, is considered particularly vulnerable to new tariffs given the industrial presence of the technology giant in China.

BofA said that, according to its calculations, Trump's threatening tariffs could reduce Apple's earnings per share by about 50 to 75 cents a year, depending on whether Apple chooses to offset that impact with higher prices or more. to absorb costs. badociated with rates. The iPhone, which recorded a 12% drop in sales in the last quarter, would account for between 30 and 50 cents of damage, according to the bank.

But badysts say the overall risk on earnings would be "manageable", with Apple reporting diluted earnings per share of $ 11.91 in its most recent year.

"In the broader context of tailwinds that [Apple] If we look at this as a relatively small amount over the next few quarters, we would use the withdrawal as a particularly good opportunity to buy Apple stock, "wrote BofA badysts in a note to their clients.

BofA expects Apple's annual earnings per share to lose up to 50 cents if the company transfers the pricing costs to consumers. Under this scenario, iPhone prices could increase by about 10%, which would reduce demand by 20%.

If it absorbs the full price, the impact could rise to 75 cents per share.

It remains uncertain that Apple products fall below the expected 10% tariff. In June, Apple announced to the US Trade Representative that a proposed price list would encompbad major products, including the iPhone, iPad and Mac. However, the California company may apply for an exemption from import duties.

Last month, the Trump administration rejected Apple's request for a waiver that would exclude Chinese-made Mac Pro parts from a separate 25 percent tariff.