fbpx
QQQ
-1.91
347.25
-0.55%
DIA
-4.49
343.14
-1.33%
SPY
-5.22
427.19
-1.24%
TLT
+ 2.44
140.60
+ 1.71%
GLD
+ 0.04
165.81
+ 0.02%

Why Apple's Coronavirus Warning May Be Better Than Expected

February 18, 2020 10:30 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Why Apple's Coronavirus Warning May Be Better Than Expected

The Street took a big bite out of Apple Inc. (NASDAQ:AAPL) Tuesday after management reported that the coronavirus, among other factors, would likely drive a second-quarter sales miss. COVID-19 has “temporarily constrained” supply, shuttered distribution sites and pressured Chinese iPhone demand.

It Could Be Worse

Cascend Securities is less concerned about supply chain disruptions than about waning demand.

“There is definitely less economic activity in China because of the virus,” Cascend Chief Investment Strategist Eric Ross wrote. “…If it gets much worse, it will impact global demand for many categories, including Apple.”

For now, though, the pain seems manageable. Apple noted the revenue impact could near $4 billion — a figure far more palatable than Cascend Securities had expected.

Related Link: 7 Ways To Invest In Gold Amid Coronavirus Fears

A Peak Down The Street

Piper Sandler called the share weakness “a temporary situation,” while Baird considered it a buying opportunity.

“Absent a longer running Coronavirus impact, we believe the broader story remains very much intact, and would be buyers on weakness,” Baird analysts wrote in a report.

Morgan Stanley noted that its full-year estimates were unshaken, but it adjusted its near-term estimates in anticipation of a revenue shift from the second quarter to the third and fourth.

“We are buyers on weakness and fully expect Apple to take advantage of any pullback to repurchase more shares,” they wrote.

What’s Next

Cascend suspects that global COVID-19 infections will peak in late March. Apple currently plans a gradual reopening of its retail sites. It will ramp factory production more slowly than expected.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

At War With Apple, Facebook Likely Setting Bigger Sight On Augmented Reality Dominance With Smartwatch Launch, Says Analyst

Facebook Inc’s (NASDAQ: FB) anticipated smartwatch launch in 2022 could be its gateway to gain on the next mobile computing platform — augmente read more

Apple Will Find It Hard To Recover From Fallout Over App Store Policies, Says Bill Gurley

Apple Inc. (NASDAQ: AAPL) would not have ended up “in the mess” it is currently in if the tech giant had implemented a 10% commission on in-app purchases, according to Silicon Valley investor Bill Gurley. read more

Will Apple Preview Highly-Anticipated Mixed Reality Goggles At WWDC 2021?

Apple Inc (NASDAQ: AAPL) could preview the mixed reality (MR) goggles as a wildcard at its upcoming annual Worldwide Developers Conference, according to Loup Ventures Managing Partner Gene Munster — who has been closely tracking the company. read more

Apple To See Revenue Growth Ahead Of Street Expectations Through 2025, Munster Estimates: What You Need To Know

Apple Inc (NASDAQ: AAPL) will continue to grow ahead of Wall Street’s expectations from the fiscal year 2022 onwards, Loup Ventures Managing Partner Gene Munster said on Thursday. read more