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Coupled with Huawei launching a new family of high-end smartphones, Apple (NASDAQ:AAPL) stock initially lost 3.6% on Wednesday before dropping nearly 3% on Thursday.
Analysts are worried about the potential impact on Apple’s iPhone sales, given that China is one of its most important markets and a major contributor to its revenue (~19%).
Here’s what top Apple analysts have to say about the most recent developments.
JPMorgan: “Even in the case of iPhone revenue/volume expectations following the launch meeting/beating low investor expectations, the magnitude of the upside to shares in the remainder of the year is going to be limited by the outperformance YTD as well as an earnings multiple that is at an ~61% premium to 2H of 2019 when AAPL shares outperformed in a similar fashion by meeting/beating low investor expectations for the iPhone 11 cycle.”
Citi: “While we remain positive into iPhone 15 launch event on Sep 12th ($100-$200 price increases for Pro models + strong replacement cycle in iPhone 12 installed base) and do not see the recent China Government/State agencies iPhone ban as a material impact to iPhone units, we view the recent news flow around China and Huawei Mate 60 launch as a headline risk for the stock.”
Bernstein: “A China ban on iPhones could signal a first step in an escalating trade war with China, which could present additional risk to Apple, given its very high concentration of manufacturing in the country.”
Morgan Stanley: “We believe Apple’s 2-day -6% stock move suggests the market thinks recent China headlines will evolve into something broader. We believe that’s unlikely. In a worst case scenario, we see 4% rev and 3% EPS downside, suggesting the stock move is overdone.”
Apple stock is flat in premarket Friday trading.
