Apple (AAPL), the world’s most successful company, was in the midst of preparations for one of its most anticipated launches ever the unleashing of the iPhone 12, the first Apple model to boast 5G capabilities.
At investment firm Wedbush, however, there is growing concern regarding the planned launch date. Wedbush’s Daniel Ives lays out 3 different scenarios regarding Apple’s flagship product’s new release.
Worst case scenario, Ives says, involves the supply chain up and running to full capacity by June, with key 5G iPhone product launches pushed back past holiday season until mid FY21. This indicates consumer demand in the US and Europe is back to normal by December while “demand across China rebounds, but demand destruction (no 5G phone) is clear throughout this key region.”
On the other end of the scale, the best-case scenario involves the supply chain revving back to full capacity by late April, the launch goes ahead as planned in the fall, and demand across China rebounds by the June and September quarters, therefore, containing any demand destruction.
Ives believes the most likely scenario to play out involves the middle ground; the launch is pushed back to the holiday season and Apple incurs some damage, but at manageable levels. The analyst estimates this situation will involve “mostly timing issues as iPhone super-cycle shifts into FY21, some but no major demand destruction, and flagship iPhone launches delayed into holiday timeframe, with lower cost iPhones hitting shelves in June (instead of March).”
All considered, Ives maintains an Outperform rating on Apple shares and keeps the price target as is, at $335. The figure implies potential upside of 35% from current levels. (To watch Ives’ track record, click here)
What does the rest of the Street think? Apple currently holds a Moderate Buy consensus rating based on 24 Buys, 9 Holds and 2 Sell ratings. At $316, the average price target is set to provide investors with gains in the shape of of 24%. (See Apple stock analysis on TipRanks)