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Morgan Stanley says the recent drop in Apple shares is nothing more than the chance to take up the stock.
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share has lagged behind the broader market over the past few weeks. One analyst says it offers a good buying opportunity.
The shares of the technology giant have fallen by 16% since reaching a closing point of $ 142.95 on January 26th. In comparison, the Nasdaq Composite fell less than 3% and the S&P 500 rose 2% in the same period. Apple shares fell 1.8% to $ 119.72 this past Friday.
The company has not actually said anything significant in recent weeks, but there is a lot of speculation that the demand for the iPhone may ease. News service Nikkei Asia reported earlier this week that Apple recently reduced its production plans for the first half of the year by 20%, mainly due to weak demand for the iPhone 12 mini, the low version of the 5G-compatible iPhone series . announced last fall. Apple did not comment on the Nikkei report and did not respond to a request for comment. Barron’s requested comments on it earlier this week.
In a research note Friday,
Morgan Stanley
Hardware analyst Katy Huberty reiterates her overweight rating and $ 164 target price on Apple shares, claiming that the recent sell-out is a buying opportunity, and that recent talk of developments in the Taiwanese supply chain is more noise than substance.
‘Over the past two weeks we have seen reports of [other analysts] that Apple is cutting production of the iPhone, ”she writes. “These reports have contributed to Apple’s recent underperformance, and investors are asking what we hear about the supply chain and how it is affecting our view of iPhone shipments this year.”
Huberty’s view is that the reports say nothing about the fundamental outlook. Checks by her colleagues in Asia find that orders are being built for iPhone 12 models – except for the mini – and that the iPhone 11 models are being raised and not lowered.
The analyst writes that monthly sales reports from 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 claims.
She also notes that Apple is still seeing strong iPhone demand in China, with sales better than those of local smartphone vendors. She estimates that Apple’s iPhone sales in China rose 157% year-on-year in January and 314% in February, according to government data on mobile phone sales. Third-party data shows that Apple’s share of the smartphone-installed base reached 20.4% last month, up from 85 basis points year-on-year, and this is the sixth consecutive month of increased market share, she adds.
While Huberty admits that there is growing evidence of soft demand for the iPhone 12 mini, she generally still believes that consensus estimates for the fiscal sales of iPhone 2021 are too low.
“We have heard anecdotally from our semiconductor colleagues that Apple’s memory purchases remain robust, which would conflict with the story of significant iPhone cuts,” she writes. “If we put it all together, we believe the news of major iPhone production cuts is likely to be more noise in the supply chain than a material issue.”
Write to Eric J. Savitz at [email protected]