BNP Paribas today raised its price target on Apple shares to $300 from $260 set in its last investor note. Here are the details.
Apple can turn a lack of memory into an opportunity
Over the past few weeks we have seen several reports from research companies showing the impact of memory shortages on the smartphone market.
These reports have generally shown that Apple keeps to reap the benefits Phone makers below the successful iPhone 17 series have been hit the hardest by the ongoing memory shortage, as their margins leave little room to absorb higher component costs.
Today’s BNP Paribas investor note (via Bloomberg) argued, Apple’s supply chain and scale put it in a stronger position to withstand these pressures and even gain share.
For this reason, BNP upgraded Apple shares from “neutral” to “outperform” and raised its price target to $300, a 15.3% increase from $260.
From Bloomberg:
“With the memory crunch affecting smaller low/mid-range peers more, we think Apple can use its size and unique supply chain to increase iPhone share, while the shift to premium devices continues,” wrote analyst David O’Connor.
Although Apple is also affected by the memory issue, he added: “iht (sic) has more leverage on the top line and costs to pull compared to its peers.”
during last quarter’s earnings callApple CEO Tim Cook and CFO Kevan Parekh said the company came out of the December quarter with a very lean iPhone inventory after stronger-than-expected demand, putting it on a “supply chase” to catch up.
They added that the restrictions at the time were more related to chip production constraints than memory, which had little impact in the December quarter but were expected to have a bigger impact on margins in Apple’s March quarter. He is expected to report on April 30.
Cook also noted that Apple has “a number of options” to deal with rising storage costs, without going into specifics.
Apple shares rose 2.59% to close at $270.23 today. The stock is up about 5% since its last quarterly results, despite recent market-wide volatility Conflict involving Iran.
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