Analysts continue to believe that Apple will only be temporarily affected by the COVID-19 pandemic. A pair of new investor notes today from Piper Sandler and Oppenheimer go more in-depth as to what to expect from this year’s iPhone releases and more.
First off, Oppenheimer analysts say that their long-term view on Apple remains the same, with a price target for the stock of $320. The analysts expect demand for Apple devices to recover from the COVID-19 outbreak by the fiscal fourth quarter of 2020.
Specifically, Oppenheimer says that Apple’s strong balance sheet and substantial cash pile will help it weather the effects of the coronavirus slowdown:
Our long-term thesis on Apple, Outperform rating, and PT of $320 are unchanged. We expect demand for Apple devices to recover starting by F4Q20 and iPhone to enter a stronger replacement cycle for FY21. Meanwhile, its substantial balance sheet and excellent financial health create a substantial competitive advantage and a wider margin of safety for investors in uncertain times.
In the near-term, Oppenheimer is taking “aggressive cuts to March and June quarter estimates” due to supply chain disruptions caused by COVID-19. The iPhone is expected to be most affected by this, followed by iPad and Mac. Software and services, however, are expected to minimally be impacted.
Meanwhile, Piper Sandler believes that Apple is still the “premiere 5G mobile phone provider,” though it estimates that 5G smartphone shipments will be lower this year than originally anticipated due to COVID-19. That being said, Piper Sandler predicts that Apple will be less affected by the drop than other companies:
The number of 5G handsets sold in 2020 is likely to be lower than previously expected (200 million) given the global impact of the coronavirus. Prior to the pandemic, Apple was forecasted to control roughly 25% of the 5G phone market in 2020. However, given the suspected second half launch, we believe the number of Apple 5G phones could be less impacted than others currently on the market today.
Regardless of overall impact, we believe Apple is considered the cream of the crop for mobile phones, particularly related to cellular generation evolutions. Longer-term, we envision the company’s other product sets could have 5G connectivity capabilities, which could drive an additional product set refreshes down the line.
Piper Sandler and Oppenheimer aren’t the only firms to share these views on Apple:
- AAPL is an opportunity during coronavirus, but other stocks more so – analysts
- Analysts mostly unfazed by Apple coronavirus impact: ‘will be temporary’
- Analyst predicts year-end rebound for AAPL as stock jumps nearly 5%
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