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Citi analyst sees growth for AAPL in 2023 despite iPhone 14 Pro production issues in holiday quarter

Apple recently proclaimed that iPhone production for holiday sales won’t come close to meeting demand. Citi analyst Jim Suva, however, doesn’t see this as a long-term problem for the company or investors.

Apple issued a statement on November 6 that cited ongoing COVID-19 precautions as reason for lower than previously expected iPhone production:

“COVID-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China,” Apple said. “The facility is currently operating at significantly reduced capacity. As we have done throughout the COVID-19 pandemic, we are prioritizing the health and safety of the workers in our supply chain.”

Apple went on to say that while iPhone 14 Pro and iPhone 14 Pro Max demand is high, the company expects “lower iPhone 14 Pro and iPhone 14 Pro Max shipments” than it previously expected.

In a research note published for Citi by Jim Suva, the analyst predicts that the big picture is rosier than the current quarter for Apple. As reported by Barron’s:

“Investor sentiment across consumer tech hardware is very dour, with many believing that the strong growth seen overall in iPhones over the past two years … is likely to see sharp declines ahead as macro inflationary pressures take a bite out of consumer spending. We do not believe this is the case,” Suva wrote. He added that there is an estimated 1 billion-plus iPhone users now, and he expects that number to not only grow but for those users to continue to upgrade their phones to newer models over the years.

“Our research does not indicate smartphone replacement rates are lengthening (compared to recent levels) and are holding steady, and in some cases even shortening overall. This implies users value their devices and technology and will likely continue to invest in upgrades on a regular cadence,” Suva said.

Suva’s optimism for the upcoming year for Apple informs his decision to hold a buy rating for AAPL. The Citi analyst predicts a 12-month price target at $175 per share. AAPL closed yesterday at $135.45.

Apple is also expected to unveil and launch its first mixed reality handset in the year ahead. The virtual reality play will mark the first new category for Apple to enter since the Apple Watch announcement in late 2014.

Do you feel positive about Apple’s financial performance in 2023? Will the first Apple headset move the needle for investors? Share your thoughts below.


Check out 9to5Mac on YouTube for more Apple news:


Author: Zac Hall
Source: 9TO5Google

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