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Analyst: No Reason For Apple Investors To Sweat Tariffs — Yet

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Analyst: No Reason For Apple Investors To Sweat Tariffs — Yet
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Tech giant Apple Inc. (NASDAQ: AAPL) continues to face uncertainty from China, but this shouldn't necessarily concern investors, according to analyst Tom Forte.

The Analyst

D.A. Davidson's Forte discussed Apple on CNBC's "Squawk Box" segment Monday.

The Thesis

An escalation or prolonged trade war with China could prove to be "problematic" for Apple for two reasons, Forte said during the CNBC interview. (See his track record here.) 

Tariffs on imported components and products from China would result in higher costs for American consumers.

Chinese consumers may want to avoid buying American products, and this poses a risk to a major market.

Nevertheless, investors have minimal reason to be concerned today, as Apple boasts a strong brand that can withstand a 5-10-percent price increase, Forte said.

Apple's higher price point for its iPhone devices — especially the latest iPhone 10 — imply that it "doesn't have to sell as many units to drive the financial benefits."

Looking forward to Apple's presentation on Wednesday, the company is likely to introduce three new smartphones: a lower-end, cheaper iPhone and two higher-end devices, the analyst said.

If the two high-end devices can sell for $1,000 or more, it would position Apple "incredibly well financially" and supports the research firm's Buy rating and $265 price target on Apple stock, he said. 

Price Action

Apple shares were trading down 1.6 percent at $217.75 at the time of publication Monday. 

Related Links:

Apple Expert: No Material Impact From Tariffs On iPhone Maker

Height Securities: Latest China Tariffs Could Be Enacted As Soon As Late September

Photo courtesy of Apple. 

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Nov 2018GuggenheimDowngradesBuyNeutral
Nov 2018Morgan StanleyMaintainsOverweightOverweight

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Posted-In: China CNBC DA Davidson iPhone Squawk BoxAnalyst Color Analyst Ratings Media Best of Benzinga

 

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