Apple temporarily shut its 53 retail stores in California amid rising COVID-19 cases across the state, according to a CNBC report.
In an email reply to CNBC, an Apple (AAPL) spokesperson said, “Due to current Covid-19 conditions in some of the communities we serve, we are temporarily closing stores in these areas.” The spokesperson further added, “We take this step with an abundance of caution as we closely monitor the situation and we look forward to having our teams and customers back as soon as possible.”
Customers will be able to shop online and get product help and information about stores through its website, the spokesperson told CNBC. (See AAPL stock analysis on TipRanks)
The report comes after Bloomberg on Dec. 18 reported that the iPhone maker is temporarily closing its stores in Los Angeles due to the resurgence of coronavirus cases.
On Dec. 16, Morgan Stanley analyst Kathryn Huberty lifted the stock’s price target to $144 (13.7% upside potential) from $136 and reiterated a Buy rating. Hubert raised Apple’s revenue and EPS estimates for fiscal 2021 citing a “flurry of product launches” including new iPhone, Mac, iPad and wearable devices over the last nine months.
Overall, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 23 Buys, 6 Holds and 1 Sell. The average price target stands at $131.88 and implies upside potential of about 4.1% to current levels. Shares have gained 72.5% year-to-date.
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Much has been made of the major near term catalyst for Apple (AAPL) -- the iPhone 12 supercycle. The anticipation is for a big chunk of Apple’s global fanbase to upgrade to the new 5G-enabled handsets over the next few years.
However, J.P. Morgan analyst Samik Chatterjee says expectations might be a tad optimistic.
“While checks indicate robust demand for 5G iPhones, particularly with lead times expanding for iPhone 12 Pro, upside to aggregate volume expectations relative to bullish buy-side expectations appears limited, which have been primed for a strong 5G cycle,” the 5-star analyst said.
In fact, heading into the new year, Chatterjee tempers investors’ expectations for Apple stock to deliver the same returns investors have grown accustomed to during the last few years’ bull run. The analyst says shareholders should expect “modest returns in 2021.”
That’s not to say Chatterjee thinks Apple’s issues run any deeper. These “modest returns” are in the 20% region (vs. this year’s 74% gain). Moreover, the analyst believes there are other causes for optimism.
In contrast to lowered 5G expectations, checks are “indicating better consumer demand for legacy iPhones (particularly iPhone 11),” and there are “WFH tailwinds for Mac/iPad, and anecdotal evidence on strength in Wearables.”
The latter, in particular, could be a source of upside in FY21.
“Recent promotional activity as well as consumer preference relative to Apple Watch and Airpods suggests upside to consensus estimates for the Wearables segment,” Chatterjee said. “For example, latest IDC forecast estimates Apple Watch volumes to increase +20% y/y in CY21, a mid- to high-single digit increase over forecast earlier in the year.”
Overall, Chatterjee reiterated an Overweight (i.e. Buy) rating on Apple shares along with a $150 price target, which implies an 18% upside from current levels. (To watch Chatterjee’s track record, click here)
Where does the rest of the Street side on Apple? It appears mostly bullish. Apple's Moderate Buy consensus rating is based on 30 reviews breaking down to 23 Buys, 6 Holds and a single Sell. However, the majority expect shares to stay range bound for now, as the current $131.88 average price target indicates. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.