Apple Puts Indian Plant on Probation Over Deplorable Living Conditions – Report

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Apple (AAPL) has put its southern Indian factory operated by iPhone assembler Foxconn on probation. Reuters reports that the decision was made after discovering that worker dormitories and dining rooms at the facility did not meet the required standards. AAPL shares rose 0.05% to close at $179.38 on December 29.

Apple is a U.S. company that designs, manufactures, and sells smartphones, personal computers, tablets, and wearables. It also offers a wide range of services. Apple’s earnings report for Fiscal Q1 2022 is scheduled for February 1, 2022.

Indian Plant

The decision to put the facility on probation follows protests after more than 250 women at the Foxconn plant became ill with food poisoning. More than 150 were hospitalized. The facility in the town of Sriperumbudur near Chennai employs close to 17,000 people.

Apple has already dispatched independent auditors to assess the conditions of the facility and dormitories. In its preliminary findings, it claims to have found that the dormitory accommodations and dining rooms do not meet requirements. However, the plant’s closure is likely to have a minimal impact on the production of the iPhone 12 and the trial production of the iPhone 13.

This is not the first time that Apple has had to suspend production operations at some of its suppliers’ plants. Last year, it placed another Indian plant operated by Wistron Corp. on probation following outrage on how workers were treated.

Stock Rating

Last week Citigroup analyst Jim Suva reiterated the buy rating on AAPL stock and raised the price target to $200 from $170, implying 11.50% upside potential to current levels. According to the analyst, Apple is well-positioned to post continued revenue growth due to strong iPhone demand. The analyst also remains bullish on the coming debut of Apple’s virtual and augmented reality headset next year.

Consensus among analysts is a Strong Buy based on 21 Buys, 4 Holds, and 1 Sell. The average Apple price target of $175.28 implies 2.29% downside potential to current levels.

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