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Apple, Inc. AAPL shares are trading lower in premarket trading on Monday after widespread protests broke out in China, which is its major production hub.
The Apple Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $200 price target for Apple shares.
The Apple Thesis: The “zero COVID” policy has now reached a tipping point, with protests flaring across the country, Ives said in a note. “Apple is essentially caught in the cross-fire heading into the all-important Christmas time period,” he added.
The analyst estimates that at least 5% of iPhone unit sales will be impacted during the quarter due to significant iPhone shortages. The impact could increase up to 10% depending on how Hon Hai Precision Manufacturing Company Limited’s HNHPF production and protests pan out, he added.
See also: How Protests Against Xi Jinping Are Sending Apple, Tesla Stocks Lower Today
Many Apple stores are seeing iPhone Pro shortages of up to 35%-45% of typical inventory heading into December, the analyst noted.
“Our bullish thesis on Apple is demand driven which is very firm, although these brutal supply shortages in the near-term remain a clear overhang for the stock to navigate,” Ives said.
Apple Price Action: In premarket trading, Apple shares were down 1.92% at $145.26, according to Benzinga Pro data.
Read Next: How To Buy Apple (AAPL) Stock
Photo: Courtesy of shutterstock.com
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Image and article originally from www.benzinga.com. Read the original article here.