Apple Inc. AAPL is days away from releasing its first-quarter report that corresponds with a period that saw a 39-percent stock decline. One Street expert is looking beyond past performance to a season of greater stability.
The Analyst
Rosenblatt Securities analyst Jun Zhang maintained a Neutral rating on Apple with a $165 price target.
The Thesis
Zhang forecast Q2 shipments of 38 to 39 million iPhone XRs, with a 1-million-unit increase in production next month. The product has so far celebrated success in a major market, he said.
“We believe iPhone XR price cuts and Chinese New Year sales are helping iPhone XR sales in China,” the analyst said.
The XS model is another story, Zhang said. Rosenblatt anticipates underperformance in Q3 and full-year shipments despite Q2 stability.
“We believe the iPhone XS still has relatively high inventory in retail channels and think shipments still face further risk,” the analyst said.
Apple’s smartphone supply chain is seen to have struck an inflection point, and Zhang said he considers immediate production weakness to be priced into industry stocks.
The market could suffer declining demand in Q3, according to Rosenblatt.
Price Action
Apple shares were trading up 2.59 percent at $156.66 at the time of publication Friday.
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Photo courtesy of Apple.
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