Apple investors have a new concern: lockdowns in response to rising COVID-19 cases in key manufacturing areas in China could negatively impact production.
Chris Ciaccia for Seeking Alpha:
Bank of America analyst Wamsi Mohan, who has a buy rating and a $215 price target, noted that Apple has a “manageable but significant” exposure to Shenzhen, where Foxconn has a manufacturing plant, calling it “a hub for a material part of the iPhone supply chain.”
“Apple/Foxconn have the ability to relocate production to other areas in the short term provided that there is not a significantly higher duration of lockdown,” Mohan wrote in a note to clients.
Mohan also pointed out that other sites in China could pick up some of the shortfall, as nearly 50% of iPhone production occurs in Zhengzhou in China’s Henan province.
MacDailyNews Take: After hitting $150.10, but never dipping below $150 ☹️ in Monday trading, shares of Apple in pre-market trading on Tuesday are up $0.68 (+0.45%) to $151.30.
Hopefully not all of the skittish AAPL money has been flushed and the share price can still dip below $150 at some point prior to Q222 earnings and the capital returns update coming in late April.
And, BTW, memo to China: There’s no such thing as zero-COVID. Duh.
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