Apple stock has lagged behind the broader market in recent weeks, but Morgan Stanley says buy Apple and ignore the “noise.”
In a research note Friday, Morgan Stanley hardware analyst Katy Huberty repeated her Overweight rating and $164 target price on Apple stock, asserting that the recent selloff is a buying opportunity, and that recent chatter about developments in the Taiwan supply chain are more noise than substance.
“Over the last two weeks, we’ve seen reports from [other analysts] that Apple is in the process of cutting iPhone production,” she writes. “These reports have contributed to Apple’s recent underperformance and investors are asking what we are hearing from the supply chain and how it impacts our view on 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 build orders for iPhone 12 models—aside from the mini—and for legacy iPhone 11 models are being raised, not lowered.
MacDailyNews Take: “Buy Apple and ignore the noise” is sound advice (pun intended).
Apple adjusts iPhone production based on the mix after every holiday shopping quarter. This year is no different. It’s been known for some time that the response to the iPhone 12 mini was tepid vs. Apple’s flagship iPhone 12 Pro Max and the other iPhone 12 models and Apple is simply adjusting output accordingly. A stronger iPhone ASP is only good news.