Analysts aren’t worried about long-term impact of coronavirus on Apple

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Analysts think investors will need to weather the storm first, though.
Photo: Ste Smith/Cult of Mac

While it’s a distant second to the human impact of coronavirus, the outbreak of COVID-19 coronavirus in China has caused plenty of disruption for Apple and its manufacturers.

But although Apple has already had to rein in its quarterly projections as a result, analysts watching the Cupertino firm aren’t getting unduly concerned. The majority of firms remain bullish when it comes to Apple’s prospects for near-term growth.

What the analysts say

JPMorgan has an “overweight” rating on Apple and a price target of $350. The investment giant thinks that supply of devices is likely to be “much lower” next quarter. It also thinks that this could continue into Q3. However, it believes that Apple’s real goldmine this year is likely to be the advent of 5G iPhones in September. By then, coronavirus risks are likely to have faded. That means that those willing to “look past these temporary headwinds” are going to be rewarded, JPMorgan states.

Wedbush has an even higher price target of $400 on Apple. Analysts Dan Ives and Strecker Backe think recent dips in the share price are the result of a “knee jerk reaction” on the part of worried investors. However, Ives and Backe believe that this is more of a “timing issue” that doesn’t change their longer term belief in Apple. It sees Apple picking up its momentum again in the June quarter. It’s then likely to ride the “5G super cycle” through the rest of 2020.

What will the impact be on Apple?

RBC Capital Market, for its part, has an “outperform” price target of $358 on Apple. Analyst Robert Muller thinks that demand is still there for Apple. However, it’s been pushed back as a result of coronavirus. But Muller admits that he doesn’t know when things will get better. “While we view the situation as temporary and our longer-term outlook is unchanged, the ultimate impact is still very much unknown,” he wrote in a note to clients.

Finally, Canaccord Genuity has a price target of $345 and a “buy” recommendation for Apple. Canaccord Genuity analysts Michael Walkley and Anthony Nemoto think that Apple’s booming Services industry is doing well enough to offset some concern about the impact of coronavirus. The firm also points out that Mac and iPad sales are hitting all-time highs. Together with share buybacks, Apple stock is unlikely to fall too much during the present coronavirus epidemic.

Right now, Apple is trading at $320.49 in pre-market trading. That’s slightly up from the $319 it closed at Tuesday. This gives Apple a market cap of around $1.396 trillion.

Source: Business Insider