California-based Apple, Inc. (AAPL) is expected to cut its 2021 iPhone 13 production guidance by up to 10 million units due to the shortage of components, Bloomberg said in a report, citing people familiar with the matter.
The company had projected to manufacture 90 million models of the new iPhone in the fourth quarter. However, it now expects a lower number as its suppliers, Texas Instruments Inc. (TXN) and Broadcom Inc. (AVGO), are unable to provide the required number of components.
Texas Instruments supplies display parts to Apple, while the tech giant gets wireless components from Broadcom. One chip that Texas Instruments supplies for the latest iPhones is in short supply. This chip helps in powering the OLED display of the phones.
Moreover, Apple’s other suppliers are also struggling to provide enough components. (See Top Smart Score Stocks on TipRanks)
Shares of the company closed 0.9% lower on Tuesday. The stock slipped another 0.6%, at the time of writing, in the early trading session on Wednesday.
Last week, UBS analyst David Vogt reiterated a Buy rating on the stock with a price target of $175 (23.7% upside potential).
The analyst said, “The highly publicized broad supply chain headwinds have raised the concern that the elevated iPhone wait times are the result of part shortages rather than strong underlying demand.”
Overall, the stock has a Strong Buy consensus rating based on 19 Buys and 6 Holds. The average Apple price target of $169.41 implies 19.7% upside potential. Shares have gained nearly 17% over the past year.
According to TipRanks’ Smart Score rating system, Apple scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.
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