Raymond James on Apple (AAPL): 'Assessing the Tariff Impact', 'we see the risk of demand destruction'

Raymond James analyst Srini Pajjuri reiterated an Outperform rating and $250.00 price target on Apple (NASDAQ: AAPL).

The analyst comments "Apple faces significant reciprocal tariffs as >90% of its hardware products are manufactured outside the U.S. The majority of AAPL products are made in China, which faces 54% tariffs (34% rate + prior 20% rate). A portion of hardware is also manufactured in India, which faces 26% tariffs. Americas accounted for 43% of AAPL sales in FY24, and we estimate that U.S. products accounted for about 25-28% of Apple’s total sales. While there may be exemptions for U.S.-sourced components, our assumption is that the entire BOM is tariffed. Our analysis shows that the net impact on Apple’s CY25 EPS could be as much as 25% on a pro-forma basis (assuming January 1 effective date), all else equal. While the company’s scale and expanding manufacturing footprint outside of China could help to mitigate the impact to an extent, our base case is for Apple to raise prices. We estimate that AAPL will need to raise U.S. hardware prices by about 30%, all else equal, in order to fully offset the tariff impact on EPS. That said, we see the risk of demand destruction in the U.S., and won’t rule out retaliatory tariffs, which could impact AAPL’s non-US product sales. We are leaving our estimates unchanged for now as we await further details regarding duration of the tariffs and Apple potential pricing/cost actions."

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $223.89 yesterday.

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