Supply chain checks in Asia bode well for Apple iPhone demand this quarter, a Wall Street analyst said Wednesday as he raised his price target on Apple stock.
Wedbush Securities analyst Daniel Ives reiterated his outperform, or buy, rating on Apple stock. He also upped his 12-month price target to 190 from 180.
"Our Asia iPhone supply chain checks this week have been incrementally more positive, with a modest uptick in demand coming out of China for Apple with a clear demand rebound happening in this key region post-December despite the uncertain macro backdrop," Ives said in a note to clients.
Data from January, February and so far in March "are steady on the iPhone front," he said. That's a stark contrast to the December-quarter, when Apple faced supply constraints due to China's zero-Covid policy. That policy impacted both iPhone production and sales in China.
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"We are seeing no major unit cuts from suppliers in Asia around iPhone production yet, which is a good sign that shows a steady demand curve," Ives said.
"Taking a step back, Apple is gaining market share in the China region with U.S./Europe demand holding up well," Ives said. He sees a pent-up demand for the iPhone 15, expected to debut in September, because roughly 25% of the current iPhone installed base has not upgraded their handset in over 4 years.
Meanwhile, investment bank TD Cowen on Monday reported that Apple lowered its iPhone production targets for the second straight month in March. Premium handset demand is softening, it said.
On the stock market today, Apple stock rose 0.8% to close at 152.87.
Wedbush's Ives believes several possible announcements could move Apple stock in the coming months. They include a rumored Apple mixed-reality headset and a hardware-subscription plan.
