Apple Christmas iPhone Sales Will Take Supply Chain Hit, Says JPMorgan; Cuts Price Target - TheStreet

Apple  (AAPL) - Get Free Report shares were progressive successful pre-market trading Tuesday pursuing a terms people chopped from analysts astatine JPMorgan and a muted vacation income outlook.

JPMorgan analyst Samik Chatterjee clipped $10 from his Apple terms target, taking it to $190 per share, portion maintaining an 'overweight' standing connected the banal heading into the last days of the trading year.

Chatterjee cautioned, however, that supply chain challenges, linked to the ongoing Covid disruption successful China, would instrumentality immoderate 4 cardinal from the tech giant's December iPhone sales, which helium present pegs astatine astir 70 million.

Last month, Bloomberg reported that Apple could spot a 6 cardinal shortfall successful iPhone accumulation from disruptions astatine its cardinal China manufacturing plant, affecting mostly its high-end iPhone 14 Pro and Pro Max devices.

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“We proceed to spot the proviso shortfall continuing done year-end and impacting the emblematic seasonal uptick successful iPhone volumes seen successful Dec-Q. Thus, we are moderating our iPhone 14 Pro / Pro Max shipment forecast again successful the Dec-Q," Chatterjee said. 

"We again expect the interaction to estimates for FY23 wide to beryllium much humble arsenic we expect portion of the shipment shortfall successful the Dec-Q to beryllium made up successful the Mar-Q with proviso constraints easing up successful the little accumulation months and lone a humble interaction to request fixed the humanities precedent for Apple consumers to hold done a delay," helium added.

Apple shares were marked 0.17% higher successful pre-market trading to bespeak an opening doorbell terms of $85.93 each. 

Apple's cardinal China manufacturing hub, based successful the northbound eastbound metropolis of Zhengzhou, saw convulsive protests successful November arsenic unit demonstrated against wage and moving conditions successful the 200,000-person works tally by Taiwan's Foxconn.

Hundreds of workers were filmed successful protestation extracurricular the plant, known arsenic 'iPhone City', with immoderate smashing windows and tearing down barricades, amid accusations of delayed bonus payments and unsafe moving conditions linked to an earlier Covid outbreak.

The protests came soon after Apple cautioned that Covid restrictions astatine the 200,000-person works would curtail shipments of its higher-end iPhones heading into the vacation play successful astir of its planetary markets.

Apple CEO Tim Cook said successful October that iPhone request has remained healthy, but noted that proviso constraints for some the 14 Pro and the 14 Pro Max continued to persist heading into the cardinal vacation season, adjacent anterior to the added restrictions astatine Zhengzhou.

iPhone revenues, successful fact, were an important constituent of Apple's better-than-expected September 4th earnings, with income rising 9.6% from past twelvemonth to $42.62 billion.

Overall revenues, however, roseate 2% from past twelvemonth to an all-time precocious of $90.15 billion, helping Apple to a Street-beating 4th fourth net tally of $1.29 per share.