Positive comments from Mnunchin equals good news for Cook and Cupertino, says analyst Daniel Ives.
From a note to clients that landed on my desktop Wednesday:
- This morning it was reported that US Treasury Secretary Mnuchin made positive comments about the current US/China UFC Trade battle, saying the countries are about "90% of the way there" (towards making a trade deal) with indication there could be more positive tea leaves to come during the G20 summit this coming weekend in Japan.
- With the US now potentially willing to hold off on the additional $325 billion worth of tariffs this could remove a major overhang from Apple as we believe the Street has been factoring in more of a worst case scenario for Cook & Co...
- From a scenario perspective, we believe a resolution to the China tariff situation could add between $20-$25 per share to Apple's stock over the coming months in our opinion, as this would take away the dark cloud currently shadowing the stock.
- We note with China representing roughly 20% of all iPhone upgrades over the next 12 to 18 months with our estimation that 60 million to 70 million iPhones in China are currently in the window of opportunity, this is a critical time for Apple to solidify its key installed base in the region.
Maintains Outperform rating and $235 price target.
My take: Ever the optimist.