“This assumption may prove too optimistic.” — Analyst Laura Martin
From a note to clients that landed on my desktop Tuesday morning:
Owing to low inventories and supply chain disruption, we lower our March and June estimates for unit sales of AirPods, iPhone 11s and we delay the launch of AAPL’s new smaller iPhone called the SE 2 from its originally scheduled March Q launch.
We lower our revenue estimates for AAPL’s March quarter by 13% and the June quarter by 7% compared to our prior estimates, based on supply chain bottleneck issues which prevent inventory restocking plus lower demand from China, which represented about 15% of AAPL’s total revenue in its most recent quarter and typically represents 15%-20% of AAPL’s total revenue.
As of today, our new estimates assume that COVID-19 disruptions, including both supply chain and demand weakness, do not negatively impact the Sept or Dec 2020 quarter and therefore we change none of our estimates for AAPL’s Sept or Dec quarters. This assumption may prove too optimistic.
Maintains Buy rating and $350 price target.
My take: Join the club.
See also: Apple 3.0 COVID-19 archives.