Maxim Group issues ‘Hold’ on Apple stock, cites over-dependence on China

Maxim Group on Wednesday initiated coverage of Apple (AAPL) with a “Hold” rating and $178 price target. Apple is too dependent on China, from a sales and supply-chain standpoint, and it is overweight a single product, the iPhone, when it comes to its near-term operating results, the firm says.

Emilio Ghigini for Investing.com:
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The firm’s assessment points to several challenges that they believe could restrain Apple’s stock performance.
Among these challenges are Apple’s significant reliance on China for both sales, which accounted for 18.9% of the company’s total in fiscal year 2023, and its supply chain operations.

The analysis also highlighted Apple’s dependence on a single product line, noting that the iPhone represented 52.3% of the company’s operating results in the same fiscal period. This over-reliance on the iPhone is seen as a potential risk factor for the company’s near-term financial health.

Furthermore, Maxim Group is closely observing a range of factors that could potentially lead to a period where Apple’s stock does not appreciate in value, which they refer to as a “prolonged dead-money period.” The issues under scrutiny include the ongoing scrutiny and potential impact of antitrust and regulatory challenges, a possible demand imbalance for consumer electronics, and increasing competition in the tech sector.

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MacDailyNews Take: While Maxim is not wrong about Apple’s over-dependence on China, that 12-month AAPL target price is hopefully way too low.
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