Oppenheimer upgraded shares to “outperform,” noting the iPhone maker was able to withstand the shocks caused by the outbreak better than its peers. Shares rallied following the upgrade.
“We believe Apple products will prove more resilient than competitive products in uncertain times,” wrote Andrew Uerkwitz, analyst at the New York-based investment bank Oppenheimer & Co.
Apple shares fell 15.9 percent, to their lowest level since December, from Feb. 14 through Friday after the iPhone maker warned the outbreak delivered a one-two punch of slower production and weaker demand, and would cause the company to miss its second-quarter revenue guidance of $63 billion to $67 billion.
Apple’s supply chain was paralyzed in the middle of January after Foxconn, which produces the iPhone and about half of China’s smartphone exports, temporarily shuttered operations to prevent the spread of the coronavirus. At the same time, Apple stores in mainland China were closed for a few weeks, zapping demand in a country that accounts for about 20 percent of purchases.
Operations have resumed for both, but are not yet up to full speed.
“It feels to me that China is getting the coronavirus under control," Apple CEO Tim Cook told FOX Business' Susan Li last week. "I mean you look at the numbers, they're coming down day by day by day and so I’m very optimistic there." He added that Apple is in "phase three” of ramping production back up to full speed.
Oppenheimer isn’t the only Wall Street firm to suggest the sell-off in Apple shares has been overdone.
Dan Ives, analyst at Wedbush Securities, wrote in a note sent to clients on Sunday that he believes the panic that has ensured as a result of the coronavirus outbreak has produced a “golden” buying opportunity in big tech.
Ives named the iPhone maker as his No. 2 pick in the sector, adding that once its supply chain returns to near full capacity the “Apple renaissance of iPhone growth story will resume.”