Devastating tariffs force Wedbush to slash Apple stock target by $75 to $250

AppleInsider

Analysts at Wedbush say that Apple's iPhone is the piece of technology hit the hardest by Trump's tariffs, and has lowered its price target by a whopping $75 as a result.

Wedbush says Apple is hit worst by tariffs because 90% of its iPhones are assembled in China

Wedbush has been raising its Apple stock price target on the expectation of growth because of Apple Intelligence. In December 2024, the price was raised to $325, but it has now been cut back to $250.

In a note to investors seen by AppleInsider, Wedbush analysts described the current situation facing Apple as a "tariff economic Armageddon," and "a complete disaster." It bases this on how 90% of iPhones are assembled in China, which Wedbush says means Apple is more affected by the tariffs than any other comparable firm.

Compared to previous issues such as COVID, Wedbush says those were uncertain times, but this is now a "very scary" situation that is devastating to Apple. Its analysts dismiss the idea of Apple moving production to the US, estimating that it would take three years and $30 billion to move even 10% to the States.

Consequently, Wedbush says that making iPhones in the US would push the price up "so dramatically [that] it's hard to comprehend." With the cost of moving manufacturing, plus the problems of insufficient skilled labor in the US, Wedbush says the short-term impact on Apple's margins would be "mind-boggling."

Wedbush is basing this on its estimate of the cost of moving 10% of manufacturing to the US, which would still leave 90% exposed to tariffs.

Even then, even with 100% of manufacturing being done in the States, Apple would still be exposed to tariffs. That's because processor manufacture, for one thing, requires rare minerals that simply do not exist in the US and must forever be imported.

Overall, Wedbush analysts say over the long term, they are bullish on Apple specifically because of its Services business. Services is why it is putting the price target as high as $250.

The company says that if the tariffs are removed, or if Apple is made exempt, its price target will go back to $325. Wedbush makes no specific judgement on the likelihood of this happening, but says it is working with the idea that tariffs will remain as they are "for a few months."

Repeatedly, though, the investment note cautions that, "the sheer uncertainty of this tariff announcement will cause demand destruction for consumers globally (recession fears, etc) and the price consequences of this tariff action are hard to grasp and model."

Wedbush last put Apple at $250 in December 2023. That valuation was partly because of Services, but chiefly on the expectation of strong holiday sales of the iPhone 15 range.



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randominternetperson

At this point $250 would be awesome. I'm afraid we won't get back there in years.

ramanpfaff

Should have just said target price is $75. That seems more likely at this point. I'm guessing at least 4 years before it hits $250.

twolf2919

Wedbush is also one of the most bullish on AAPL - most analyst had  AAPL at $250 or lower *before* any of this tariff stuff.    And the reason for that was that Apple hadn't developed anything interesting for awhile and its Apple Intelligence completely underwhelmed and with its most important contribution, a vastly improved Siri, missing in action until at least 2026.  With the massive tariff headwinds - including a possible tariff on services coming out of the EU in retaliation for our "President"'s tariff lunacy - and lack of imminent new products (other than potentially the iPhone 17 Air),  I thin a move down to the $120 range isn't out of the question.

bsimpsen

With both less revenue due to demand destruction and less earnings due to higher taxes, Apple will have less money to invest in American manufacturing. I'd be surprised if Apple actually spends the $500 billion it committed to US expansion under the Biden administration. Would any of you invest in a future being whipsawed about by the mercurial Trump?

xed

This is what happens when you remove intelligent, talented people and replace them with people who either kiss your ass and/or pay you for access. Cronyism at the highest levels of stupidity.

tmay

Of course, the simple solution is to bring back child labor;

https://www.theguardian.com/us-news/2023/oct/20/republican-child-labor-law-death

xed

tmay said:

Of course, the simple solution is to bring back child labor;

https://www.theguardian.com/us-news/2023/oct/20/republican-child-labor-law-death

They destroyed the US labor so they have to. Even if they change their stance on immigration they've already revoked countless legal visas so they could deport even more brown people, even to the point of deporting US citizens that were naturalized or even born in the country whose only crime was having the wrong skin color. Who's going to want to come here to work the jobs no one else wants to do if they can't trust that they'll not be penalized for being here legally?

aderutter

TimC should tell Trump that Apple will, because of the impact of the tariffs, no longer have the revenue to invest in US manufacturing at all. 

charlesn

This new price target is almost as stupid as the Orange Lunatic's tariffs. Apple's all-time high stock price was just under $260, and it has been slowly drifting down from that level ever since it hit it in late December, long before the tariff crisis. So slapping a new price target on APPL now that's within spitting distance of its all-time high makes no sense. The most honest price target right now would be, "We don't know," since it hinges entirely on what happens with tariffs, which ended up being more severe than even worst case scenarios predicted. So who can possibly predict what the White House imbecile will do next? Just look at today's headlines: as bad as the China tariffs already are for Apple, Cheeto Jeezuz is threatening another 50% on top of that! 

blastdoor

Apple should start a travel agency that specializes in visits to Apple stores in other countries where people can buy their Apple gear tariff-free and then carry it back into the US. 

xed

blastdoor said:

Apple should start a travel agency that specializes in visits to Apple stores in other countries where people can buy their Apple gear tariff-free and then carry it back into the US. 

You're required to declare such items and then pay appropriately to bring it back into the country. If it were that simple, Apple (and others) could just open up shop in an FTZ ( free-trade zone or foreign trade zone) at any given international port where goods are considered to be not in the US, in this case, while still being on that country's land by all other accounts.

https://www.cbp.gov/border-security/ports-entry/cargo-security/cargo-control/foreign-trade-zones/about

edited 1:15PM