Morgan Stanley (MS) analyst Erik Woodring has reiterated a Buy rating on Apple (AAPL) stock, citing long-term growth potential despite short-term challenges. Also, his price target of $235 implies 18.37% upside from the current level. The analyst’s bullish rating comes amid reports of the iPhone maker raising prices for its new smartphones.
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Woodring pointed out Apple’s history of outperforming during periods of negative sentiment and sees positive catalysts ahead, such as better U.S.-China trade relations and the upcoming Worldwide Developers Conference (WWDC) event, which could drive further stock gains.
Meanwhile, he noted risks in Apple’s Services segment, such as legal issues and shifts in digital advertising, but believes the market is overreacting to these concerns.
AAPL’s Manufacturing Still Reliant on China
Recently, the Wall Street Journal reported AAPL is planning to raise prices for the new iPhones, as it adds new features and design updates. However, the tech giant is avoiding linking the price changes directly to U.S. tariffs on Chinese imports, even though most iPhones are made in China.
It must be noted that despite the U.S. and China’s deal to slash tariffs by 115%, Apple’s smartphones are still subject to a 20% tariff imposed by President Trump on Chinese goods, citing fentanyl trafficking concerns.
Importantly, the company has been making efforts to reduce the impact of U.S.-China trade issues, which could hurt its supply chain. For instance, AAPL stocked up on inventory before tariffs changed and is moving some U.S. iPhone production to India.
At the same time, Apple’s high-end iPhones, like the Pro and Pro Max, will mostly be made in China. While India can build some Pro models, its facilities are not yet big or advanced enough to match China’s scale. These premium models feature advanced camera systems and larger batteries.
Thus, raising iPhone prices could help Apple keep profits strong while focusing on new features.
Is AAPL a Good Stock to Buy?
Turning to Wall Street, AAPL stock has a Moderate Buy consensus rating based on 17 Buys, eight Holds, and four Sells assigned in the last three months. At $228.65, the average Apple stock price target implies a 15.17% upside potential.
See more AAPL analyst ratings.
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