‘It’s a lot more of headline risks than anything else’: Analyst maintains bullish outlook on Apple

Crucial Points to Remember

  • Despite the iPhone’s pressing supply issues arising from possible worker shortages due to an extensive Covid outbreak in China. One of the analysts still sticks to bullish predictions on Apple.
  • The Senior Industry analyst at a US-based company CFRA Research, Angelo Zino, stated that Apple deals with a lot more of headline risks than anything else.
  • The tech giant’s shares fell to their 1.5-year-lowest.

Despite the Tech giant’s fall, bringing it down to the lowest point since June 2021, amid its current iPhone supply shortages, one analyst still believes in a bullish market for Apple.

The senior analyst at CFRA Research, Angelo Zino, mentioned to CNBC’s “Squawk Box Asia” on Wednesday that “Apple is the biggest U.S. name out there, and we think it is a lot more headline risks than anything else,”

The headline risk is the threat that a firm’s share prices may fall due to the negative news feed.

Apple’s share prices dropped to their lowest as of June 2021 due to the prevalent Covid outbreak in China, soon after the country let go of its zero-Covid policy, posing a threat to iPhone’s production cycle.

The recent outbreak could lead to worker shortages at Apple’s constituent assembly factories or plants across China.

As for the past couple of months, Apple has already been struggling with concerns like production shortages. In the month of November, the product ‘iPhone 14’ and its production were struck by labor protests and Covid-19 restrictive measures. It primarily impacted the iPhone 14 Pro Max and iPhone 14 Pro assembly plant in Zhengzhou, China.

An analyst from JPMorgan Chase stated last week that the supply deficit would carry on along the year’s end and assess the average season results in its product volume. Apple even alarmed its audience on November 6th of a “significant disruption” before the holidays.

Samik Chatterjee said in a note left for investors, “While the rapid extension of lead times for the iPhone 14 Pro/Pro Max has slowed down and in fact began to moderate in recent weeks, it still remains elevated relative to the lead times seen prior to the COVID outbreak in Zhengzhou”

Zino stated, “Ultimately, Apple is going to do everything they possibly can to defend their business as long as they can across different geographical regions.”

He went on to add that the real impact felt by the top liners will be less than 1% across the US and Europe.

Numerous analysts foresaw that Apple’s customers would remain devoted to the brand’s products despite the shortages.

Zino stated, “We think a lot of the consumers out there are creatures of habit and won’t necessarily steer away from what they have done historically on Apple’s ecosystem.”

In his interview, he also said that Microsoft and Apple have stood firm despite the commotion in the tech industry.

Further, Zino said, “When you look at the names that have held up the best, two of them are Apple and Microsoft and that makes a lot of sense.”

“Because from a multiple perspective, they are a lot more affordable than some of the other names out there and have the best free cash flow predictability.”

- Published By Team Timeswire

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