Analyst is bullish on Apple because ‘it’s too high risk’

An Apple Store at Nanjing Road Pedestrian Street on December 16, 2022 in Shanghai, China.

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One analyst maintains bullish stance Apple This despite the tech giant’s shares falling to their lowest level since June 2021 amid iPhone supply concerns.

“Apple is the biggest name in America, and we think it’s at a much higher risk than anything else,” Angelo Zino, senior industry analyst at CFRA Research, told CNBC’s “Squawk Box Asia” on Wednesday.

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Headline risk is the risk that a company’s stock price will decline from negative news coverage.

Apple shares fell to their lowest level since June 2021 as iPhone production is under threat from a widespread Covid outbreak in China after the country exited its zero-Covid policy.

The outbreak could potentially lead to labor shortages at component plants or assembly factories across the country.

For the past two months, Apple is already grappling with production shortages. In November, iPhone 14 production was hit by COVID-19 restrictions and labor protests at its primary iPhone 14 Pro and iPhone 14 Pro Max assembly plants in Zhengzhou, China.

Last week, an analyst at JPMorgan Chase said a supply shortfall should continue through the end of the year and weigh on the usual seasonal uptick in volumes. Apple warned of “significant disruption” on November 6 ahead of the holiday season.

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Samik said, “Although the rapid extension of the deadline for the iPhone 14 Pro/Pro Max has slowed down and actually started to moderate in recent weeks, it is still close to the levels seen before the COVID outbreak in Zhengzhou.” increased relative to time. Chatterjee, in a note to investors.

“Ultimately, Apple is going to do everything they possibly can to protect their business in as many different geographies as they can,” Zino said.

He further added that the actual impact on the top line is going to be less than 1% in the US and Europe.

Despite the shortfall, many analysts predicted that Apple customers would remain loyal to the brand’s products.

Apple and Microsoft holding up despite headwinds in tech, analyst says

“We think a lot of consumers are creatures of habit and don’t necessarily get carried away by what they’ve historically done on Apple’s ecosystem,” Zino said.

In the interview, he also mentioned that Apple and Microsoft Stayed in the technical field despite adverse circumstances.

“When you look at the names that are the best, two of them are Apple and Microsoft and that counts for a lot,” Zino said.

“Because from a multiples perspective, they’re a lot more affordable than some of the other names out there and they have the best free cash flow forecast.”

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