Apple's China Production Risks Coming Home To Roost

Nov. 18, 2022 10:30 AM ETApple Inc. (AAPL)43 Comments

Summary

  • Apple investors must brace themselves for a highly challenging December quarter as Apple's iPhone facility in China's Zhengzhou faces significant staffing shortages.
  • Therefore, we discuss why Wall Street's estimates for its December quarter seem to be at significant risk of further markdowns to reflect the severity of the headwinds in China.
  • With AAPL overvalued at an NTM P/E of 24x (Vs. 10Y average of 17.5x), investors need to be prepared for value compression.
  • We discuss why investors sitting on significant gains should use the recent rally to take some profits off the table.
  • Maintain Sell.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
Apple Store in China

Nikada

Thesis

Apple Inc. (NASDAQ:AAPL) stock has continued to demonstrate increasingly likely signals of breaking down further from its recent October/November lows.

Despite the recent recovery after its initial post-earnings selloff, Apple buyers have been unable to muster significant upward momentum to

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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