Apple Analyst Says 'Uncertainty Remains Too High' To Buy The Dip

Apple Inc. AAPL announced Friday that it will close all retail stores located outside of Greater China through the end of March.

This could result in around $1 billion in lost revenue, or 2% of March quarter sales, according to Credit Suisse.

The Apple Analyst

Matthew Cabral maintained a Neutral rating on Apple with an unchanged $290 price target. 

The Apple Thesis

Shares of Apple are down 14% since the broader stock market reached its peak, Cabral said in a Monday note, adding that Cupertino has a $99-billion net cash balance. (See his track record here.)

"Uncertainty remains too high" moving forward to buy the dip, as Apple stores could remain closed for longer than two weeks based on how the coronavirus crisis evolves over the near-term, the analyst said. 

The company's online stores remain open as usual, while all 52 Apple stores in Greater China have also opened their doors, he said. 

Once global stores reopen, the macroeconomic picture could be difficult, Cabral said.

Credit Suisse economists are predicting second-quarter U.S. GDP will come in at 0.9%, with a downside scenario closer to negative 4% and full-year GDP of zero, the analyst said. 

While there may be "pent-up demand" for a 5G device, given the recent "significant" extensions in the iPhone replacement cycle, consumers could view a new iPhone as "more of a discretionary purchase they can postpone, according to Credit Suisse. 

AAPL Price Action

Apple shares were down 10.06% at $250 at the time of publication Monday. 

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Photo courtesy of Apple.