Apple (NASDAQ: AAPL) stock price resumed the uptrend after plummeting from an all-time high of $327 to $270 last week on coronavirus related concerns. China is among the key markets for Apple; the largest tech company has also established several manufacturing and production facilities in China over the past couple of years.
The chief executive officer Tim Cook recently announced that they will miss the March quarter forecast due to supply and demand disruption. He, however, looks optimistic over the supply chain network and calls it a temporary condition.
Supply Chain Network Is Improving
Although the virus impact is now shifting towards South Korea and Italy, the company says China is important for them when compared to other markets.
“It’s important to see what happens in the new areas to determine what business effect comes from that. “Our supply chain is relatively more important in China,” but there are suppliers in Korea and Italy,” Tim Cook said.
Nomura analyst Jeffrey Kvaal claims that the Apple supply chain is recovering faster than the expected pace. “The estimate indicates that Apple’s supply chain is recovering faster than hoped, but notes there could still be demand impact related to the coronavirus,” Kvaal said.
Apple stock price targets are high despite lower financial estimates for 2020
Needham Analyst Laura Martin believes virus impact could drop Apple’s financial numbers drastically from previous estimates. The firm declined the second quarter and third-quarter earnings per share estimates to $2.47 and $2.44, respectively, compared to the prior estimate of $2.99 to $2.76. It also declined FY 2020 revenue forecast to $268.76B from $282.92B.
Analyst Laura Martin believes that if virus spread continues in the second half it could delay the fall iPhone release. Laura Martin sets $350 price target. Wedbush provides a price target of $400, saying Apple’s supply chain in China will be in operation by late April or early May.