The price of Apple shares rose on Tuesday despite investment firms Morgan Stanley and UBS tweaking estimates related to the impact on iPhone 14 and iPhone 14 Pro production due to China’s quixotic “Zero COVID” lockdowns, with Morgan Stanley saying an opportunity to “buy the dip” has emerged.
Chris Ciaccia for Seeking Alpha:
Morgan Stanley analyst Erik Woodring lowered his fiscal 2023 revenue and earnings per share estimates by 0.3% and 0.5% to $407.7B and $6.15, noting that while the situation in the populous Chinese city is “fluid,” it’s likely a deferral not a demand destruction.
“…We believe this situation equates to more of a deferral of iPhone demand than a destruction of demand, which does not change our [overweight] thesis,” Woodring wrote in a note to clients. “As a result, we would be methodical buyers of the stock as it approaches 20x P/E – roughly 6.5x turns lower than its recent peak in August 2022 and in-line with its trailing 5 year average.”
UBS analyst David Vogt lowered his first-quarter revenue and earnings per share estimates by 2% and 3%, respectively, while also cutting his iPhone unit estimate for the December quarter to 83M, down from 86.5M… “While the increase in wait times are not ideal from a consumer perspective as delivery dates extend beyond Black Friday, we believe the impact is measured in the low single digits,” Vogt wrote.
MacDailyNews Take: So, much for our short-lived sub-$130 dream!
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