Everything seemed to conspire against Apple at this time in the stock market. An obviously unfavorable situation with the closure of the market by Russian will and the potential consumption effect that can derive from triggered inflation for a western population in which it will directly impact their income.
To all this we add that this year the rise in interest rates turns against him with the predictable rise in costs of your business at all levels, with an eye on the raw materials you use in the manufacture of your products.
In context, what I added is a new problem: the biggest rebound of Covid-19 in the country where it started, since the events in Wuhan . We are talking about the confinement of several cities in the country, including the most “technological” one. We are talking about Shenzhen, in the southwest of China, where some of the technological factories are located The most important in the world and with giants like Tencent or Huawei.
And there Foxconn, one of the great Apple testers have had to stop their operations for the confinement and the new positives since last Saturday. It is true that the company has adjusted its production line on other occasions to compensate for this stoppage, but the effect on Apple has already been reflected in the price of its shares. The best thing about it is that the value has been revitalized with the partial return to work of these factories.
From the Bank of America, as highlighted by Bloomberg, they affirm that this stop “ can cause ripple effects on other components that can create a production shortfall.” AND it is not just about production as Shenzhen is home to one of the world’s highest container ports, which, if continued, could affect the global supply chain.
In its stock chart we see that Apple suffers in the price after the losses registered in the last five consecutive weeks, which represents its highest level of weekly cuts since those registered in May 2021. In fact, in the last five days, the cut exceeds 2% for its shares, with losses of 7.5% in the month, namely11% in the quarter and, so far this year, its cut already reaches 10.1%.
Apple shares are already trading at their lowest level since November While they are separated by more than 17% of their highs reached in early January, something that has even made them lose this week, the level of capitalization below 2.5 billion dollars . And it opens, as always, the great debate on whether, at these prices, it is convenient to take a long-term position on value. Although analysts point out that the cuts could continue in the short term.
As for the recommendation, from TipRanks, of the 28 analysts who follow the value, 23 choose to buy their shares in the market and 5 more to keep Apple titles in their portfolio. With an average price of 193.36 dollars per share, with high bands of 215 dollars and the low of 161 dollars. Its market potential exceeds 21%.
From Evercore, the last to pronounce on the value, they place the target price of their shares at 210 dollars advice to overweight the value in the portfolios. Its analyst Amit Daryanani points out that in the case of Apple, investors are underestimating the opportunity offered by sports broadcasting. Consider that this is an area where you can leverage your significant financial power to gain broadcasting rights, as you have significant technical infrastructure, with which you will provide a great user experience.
All this after the announcement that Apple that it will broadcast two MLB league baseball games a week. In addition, his new step could be the NFL, the American football league, in which he starts as a favorite along with Amazon to get the rights. Apple TV does not seek to become Netflix but to have content in high-quality series and movies and important sporting events.
While that from Bank of America they advise comparing the actions with a target price of 215 dollars by title while from Morgan Stanley overweight the stock with a PT of $210 per share. Far below, however, we find the recommendation of Barclays that leaves its advice at the same as the market, with a target price of 170 dollars per share from the previous 169.
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