Tim CookSource: Apple

What you need to know

  • Morgan Stanley has affirmed its 'overweight' rating of AAPL shares.
  • Top analyst Katy Huberty has cut her target price by 9%.
  • She says consumer demand could be weak in both 2020 and 2021.

A top industry analyst has reportedly affirmed her rating of AAPL stock as 'overweight, cutting the target price by 9%.

As reported by The Street:

Apple (AAPL) - shares were affirmed overweight by a top industry analyst, Morgan Stanley's Katy Huberty, who cut her price target 9% as consumer spending weakens and many Apple stores stay closed during the coronavirus pandemic.

Huberty cut her price target to $298 a share from $328. This was her third price-target cut on the Cupertino, Calif., company this year.

Uncertainty in the current market is "significant," she wrote. And she is cutting her earnings estimates to reflect "a weaker consumer in fiscal years 2020 and 2021."

Huberty did, however, note that even though "earnings could surprise negatively if social -distancing measures last longer or consumer balance sheets deteriorate more", Apple is "best positioned" to recover prior earnings and revenue trajectories and getting back on track, The Street said..

She has also noted that Apple has "industry-leading customer retention rates and a strong balance sheet". She also stated that she expects Apple to continue buying back $20 billion of shares each quarter, and paying around $14 billion in annual dividends, according to The Street.

The most recent report suggests that Apple Stores and offices throughout the US may not reopen until at least May due to the coronavirus pandemic. This revelation, if true could have a further profound impact on Apple's revenue. Only Apple's 42 stores in Greater China are currently open.