Apple Price Target Cut By Bullish Analyst Amid Demand Woes: Why He Still Sees It As A 'Rock Of Gibraltar Name' For 2023

Apple, Inc. AAPL shares came under renewed selling pressure on Tuesday on demand worries.

The Apple Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and reduced the price target from $200 to $175.

The Apple Thesis: Supply chain checks from Asia are mixed concerning the next few quarters, with Apple seemingly cutting back orders for Macs, iPads and AirPods to reflect a softer consumer backdrop, Ives said in a note.

The core iPhone 14 Pro demand appears to be more stable than feared as supply recovers from the situation seen in November/December due to the COVID-19 lockdowns at its supplier Hon Hai Precision Manufacturing Company Limited’s HNHPF iPhone assembly plant in China, he noted.

Although not ruling out some cutting of iPhone orders, especially the iPhone 14 Plus orders, the analyst said the overall demand environment is more resilient than Street expectations.

A massive amount of bad news is already baked into the stock, he said.

See also: How to Buy Apple (AAPL) Stock

The 8 million to 9 million iPhone units pushed out of the December quarter due to supply chain issues should benefit the March quarter, Ives said. “Apple remains the laser focus of the tech bears as this name has held up much better than the rest of the beaten-down tech sector over the past year,” he added.

The analyst, however, believes Apple has a unique installed base demand story that can withstand macro pressures better than its tech peers. It should remain a “rock of gibraltar name into 2023,” he added.

On a sum-of-parts valuation, the right value for the stock is $200, reflecting its core services business, with a base-case valuation of $175, the analyst said. The price target reduction, according to him, reflects a “more base case valuation” in the current uncertain environment.

Apple remains Wedbush’s favorite tech name, Ives said.

Apple Price Action: In premarket trading on Wednesday, Apple shares were rising 0.54% to $125.74, according to Benzinga Pro data.

Read next: Apple Has 3 Massive Growth Opportunities With 'Another Decade Of Solid Performance,' Analyst Says