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On Saturday, Wedbush analysts maintained their Outperform rating and $270.00 price target on Apple stock (NASDAQ:AAPL), in light of recent developments involving potential tariffs. The stock, which has declined over 7.5% in the past week and is trading at relatively high valuation multiples according to InvestingPro data, faces new challenges in its global manufacturing strategy. President Trump declared on Truth Social that Apple could face a tariff of at least 25% due to its decision to increase iPhone production in India rather than the United States. This statement follows an earlier announcement that Foxconn (SS:601138) is set to build a $1.5 billion factory in India, as Apple aims to shift its production away from China amidst an uncertain tariff environment.
The Trump administration has pressured Apple to manufacture iPhones in the U.S., a move that Wedbush analysts believe is impractical. The firm points out that Apple’s current investments in the U.S. are mainly focused on AI-driven initiatives and that shifting iPhone production stateside would not be feasible in the near term due to cost concerns and the complexity of supply chain logistics.
Wedbush suggests that producing iPhones in the U.S. would significantly increase the price to around $3,500 per device, a price point considered unrealistic by the Cupertino-based company. The analysts argue that such a transition would require 5-10 years, making the idea of U.S.-based iPhone production a "fairy tale" and not a viable option for Apple at this time.
The announcement of potential tariffs comes as Apple continues to navigate the challenges posed by global trade tensions. Despite these pressures, Wedbush’s stance on Apple’s stock remains positive, with no change to their price target or rating. The analysts’ commentary underscores the complexities that major tech companies face in balancing manufacturing strategies with geopolitical and economic factors. With a market capitalization of $2.92 trillion and an EBITDA of $138.87 billion in the last twelve months, Apple maintains strong financial metrics despite current headwinds. InvestingPro analysis reveals 14+ additional key insights about Apple’s financial health and market position, available in the comprehensive Pro Research Report, which helps investors make more informed decisions during uncertain market conditions.
In other recent news, Apple Inc. is facing potential challenges due to proposed tariffs on its products. Analysts from Citi, Goldman Sachs, and JPMorgan have all maintained their positive ratings on Apple stock despite these developments. Citi has kept a Buy rating with a $240 price target, projecting a potential impact on Apple’s earnings per share due to tariffs but suggesting that the company could offset some costs. Similarly, Goldman Sachs reaffirmed its Buy rating with a $253 target, noting that existing tariffs already align with the proposed ones, and emphasizing Apple’s ability to navigate these trade policies. JPMorgan also maintained an Overweight rating and a $240 target, highlighting Apple’s strong pricing power and ability to manage cost increases.
In addition to tariffs, Apple is actively opposing a Texas law that requires age verification for device users. CEO Tim Cook has personally engaged with Texas Governor Greg Abbott to request changes to the legislation. The company has also increased lobbying efforts and launched a local advertising campaign against the bill. Meanwhile, President Trump has clarified that the proposed 25% tariff will apply not only to Apple but also to Samsung (KS:005930) and other smartphone manufacturers, ensuring a level playing field. The tariffs are expected to take effect at the end of June, affecting companies that do not manufacture their products in the U.S.
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