Apple (AAPL) improving wait times suggest supply chain headwinds easing - UBS

December 6, 2022 11:59 AM EST
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UBS analyst David Vogt said in a note to clients Tuesday that according to its Evidence Lab data, Apple's (NASDAQ: AAPL) improving wait times suggest the supply chain headwind is abating.

"Utilizing UBS Evidence Lab data (>Access Dataset) that tracks iPhone availability across 30 countries, wait times across most markets, including the US and China improved relative to both last week and two weeks ago indicating the supply chain disruptions are easing on the margin," explained Vogt, who has a Buy rating and $180 price target on Apple shares.

He added that in the US, wait times for the 14 Pro and 14 Pro Max declined to 25 days compared to 38 days two weeks ago, while in China, wait times also decreased from two weeks ago, but the drop was smaller.

Apple's iPhone supply chain has been significantly impacted by protests at manufacturing facilities in China due to Covid related restrictions.

"Wait times for both the 14 Pro and 14 Pro Max in China are roughly 36 days, down from 39 days last week and two weeks ago," continued Vogt.

If the rate of improvement continues in the US, it might be possible for consumers to receive a new iPhone 14 Pro or Pro Max in time for Christmas. While the trend is a welcome respite, we believe the market is likely to view the December and March quarters in aggregate relative to last year to gauge underlying demand. Despite the recent disruptions, we believe iPhone demand has been largely durable with a limited number of consumers willing to leave the Apple ecosystem. As such, our combined December and March forecast of 144 million iPhones is flat with last year," the analyst concluded.

Apple shares are down more than 1% so far on Tuesday.

By Sam Boughedda

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