Analysts mostly unfazed by Apple coronavirus impact: ‘will be temporary’

Analysts so far appear mostly unfazed by the Apple coronavirus impact. The prevailing view is that the effect will be temporary, and that Apple’s core strengths mean the medium- and long-term outlook remains good.

Investors appear to be taking the same view. The stock did take a bit of a dip yesterday, at one point 3.2% down after a bigger fall in pre-market trading, but ended the day just 1.83% down …

Business Insider reviewed investor’s notes from four analysts, who all remain bullish on the stock. All four reports refer to the issue as a temporary one, with long-term prospects unaffected.

JPMorgan described the problem as ‘temporary headwinds.’

The virus’ drag on Chinese demand and global supply will drive “much lower” second-quarter volumes and even spill into the third quarter of 2020, but the company’s long-term outlook hasn’t changed yet, JPMorgan analysts wrote Monday […]

“We expect most long-term investors in Apple shares to look past these temporary headwinds, with both products and services continuing to demonstrate strong underlying consumer demand,” the team led by Samik Chatterjee wrote.

Wedbush said the Apple coronavirus impact was just ‘a timing issue.’

“We believe this is a more of a timing issue rather than an extended supply/demand issue for iPhones globally and does not change our longer term bullish thesis on the name,” the team wrote […]

Wedbush sees the firm potentially bouncing back in the June quarter and riding the “5G super cycle” through the end of the year.

RBS says while the ultimate impact remains unknown, most sales lost in Q2 will simply be delayed to Q3.

Monday’s statement signals revenue will simply be delayed until the third quarter, analyst Robert Muller wrote. The most important variable is the spread of coronavirus in the near future, as a prolonged pandemic could keep demand in China stifled for quarters to come.

“We view the situation as temporary and our longer-term outlook is unchanged.”

Canaccord Genuity says the company’s relatively diverse income streams will help.

Record revenue for its Services business is expected to “outpace total company growth,” and Mac and iPad sales are reaching all-time highs despite relatively high bars to clear, they added.

Apple’s diversified mix of product and service revenues, along with expected boosts to share buybacks, will keep the stock from falling too much as it weathers the coronavirus storm, analysts Michael Walkley and Anthony Nemoto wrote. “We believe Apple is well positioned for strong trends across all its business lines.”