In China, the city of Zhengzhou – home to the world’s largest iPhone assembly factory – has lifted its quixotic “Zero COVID” lockdown restrictions after five days, but the damage to iPhone production, during the all-important Christmas shopping season, may have already been done. However, one analyst says that Apple’s stock price won’t feel the full impact of the supply woes these lockdowns cause.
Wedbush analysts, led by Dan Ives, expect roughly 10 million to 15 million iPhone shipments will be pushed out in the March quarter instead “as supply starts to ramp back up.” Of course, that assumes no further protests or shutdowns.
“The Street will mostly look through this production disaster for Apple as a shift in iPhone timing and not penalize the stock to the full extent,” Ives added.
Estimating a demand to supply ratio of 3:1, he said Apple stores, retailers and online channels are “looking empty handed” for most Pro models until early January. A “painful waiting game” will now begin to see what ramped up production looks like and how much it can ease shortages.
Wedbush maintained its Outperform rating on the stock, with a target price of $200, implying a 42% upside to Tuesday’s closing price.
MacDailyNews Take: Again, “These iPhone 14 Pro sales are merely deferred, not lost. Some may shift down to iPhone 14 and iPhone 14 Plus, but most buyers will simply wait for supply to catch up amidst strong demand.”
See also: Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
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