Apple in mid-February announced that that the company would be unlikely to meet its March quarter guidance, citing both supply and demand issues in response to the COVID-19 pandemic. Now, Argus projects the negative impact is likely to play out in more than one quarter.
Jim Kelleher reiterated a Buy rating on the shares of Apple with a $350 price target… Apple likely delaying the launch of its 5G iPhones from September to closer to Christmas or even into calendar year 2021, he said. “Apple may see a multi-quarter impact on iPhones shipments, as the COVID-19 pandemic continue to rage worldwide.”
Apple has multiple strengths to help carry it through this turbulent period, Kelleher said. The analyst pointed to the successful diversification of iPhones across multiple price points that has served to broaden the market opportunity, booming demand for wearables such as AirPods and faster-than-planned growth of Apple Play during the shelter-at-home phase.
Although Kelleher said Apple has the financial might to sustain both share buybacks and dividend growth during the pandemic, he said he expects the company to deemphasize buybacks.
MacDailyNews Take: COVID-19 will surely be a multi-quarter impact on Apple (and everyone else) as it will take multiple quarters to get to the ultimate goal of a safe, effective vaccine. Thankfully, for Apple shareholders, the company certainly does have the financial might to carry through to the vaccine!