Monday’s Supreme Court ruling and the US-China trade war are not a “threat to future growth potential” for Apple, analysts said (via AppleInsider). The analysts from Cowen maintained Tuesday that the impact of these issues “can be moderated over time.”
SCOTUS Ruling
Monday’s Supreme ruling “increases the probability that Apple may have modest financial risk due to monetary awards,” said the note to clients. It also recognized that it could take between 18 and 24 months before the company is required to pay anything if the plaintiffs are successful.
‘Real Risk’ From Tariffs
However, Cowen also said that there is a “very real risk” if the expanded trade tariffs on Chinese goods proposed by the Trump Administration come into effect in June as planned. It said that Apple’s Earning Per Share (EPS) could drop by 14% If Apple responds by increasing the price of the iPhone, that would result in “demand destruction” of 10%-40%, they explained.
Overall, the analysts wrote:
We maintain our positive view on Apple stock and believe our thesis for Services business growth and stable hardware product sales longer term remains under-appreciated by the market.
It maintained its “outperform” rating for Apple stock. It set a target price of $245 a share.