When we consider the fortune of the FAANG family since the viral epidemic, it seems that Apple (AAPL) has the most to lose. Amazon and Netflix may consider their Internet-based models to be particularly well-configured for hibernation. And although Google and Facebook are losing significant advertising revenue, they are still less dependent on physical products. Apple, on the other hand, has seen disruption in its supply chain and production chain have a serious impact on this year’s plans.
The giant of Cupertino was preparing the ground for the launch in September of the iPhone 12, the first model with 5G capabilities. The question now facing the most successful company in the world is whether, after the economic downturn, launch its flagship product in a consumer environment still reeling from a global pandemic and the associated depressed economic climate, is the right decision.
According to Daniel Ives of Wedbush, the answer is no. The 4-star analyst believes that there are too many variables at play to ensure a safe launch on the previously scheduled date, and argues that a launch in September would amount to a risky decision. Ives think the launch will be postponed to coincide with the holiday season.
“Apple has a chance on its first launch of 5G and the lukewarm success of the doors due to lukewarm consumer appetite would be a disaster scenario that plays more in the minds of Cook & Co. while they are reflecting on the potential schedule for this flagship product deployment, ”said Ives.
However, delaying the “5G super cycle” does not change Ives’ long-term bullish view of Apple. In fact, the analyst notes, the company’s “Teflon-like” service activity is “poised to reach around $ 60 billion in FY21.” In addition, Ives maintains that at current levels of coronavirus success, the risk / reward on the stock is “extremely compelling”.
Ives summed up: “In a nutshell, Apple’s stock is now priced in depressed iPhone units, a 5G launch is delayed and the supply chain doesn’t normalize until May / June. We believe that the iPhone 12 will likely launch around the holiday season in a more standardized consumer environment with a “springboard-like demand” momentum for Exercise 21 “.
To this end, Ives maintains an outperformance on Apple, to go with a price target of $ 335. Implication for investors? An increase of 36%. (To look at Ives’ background, click here)
What does the rest of the street have to say? Apple currently has a moderate consensual purchase note based on 25 purchase notes, 9 hold orders and 2 sell notes issued in the past 3 months. The average price target is $ 318.55 and could provide investors with a 30% increase. (See top analysts at TipRanks)