Apple rises even as Morgan Stanley, UBS tweak estimates on China-related iPhone issues
grinvalds

Apple (NASDAQ:AAPL) shares rose on Tuesday even as investment firms Morgan Stanley and UBS tweaked estimates related to the impact from China's COVID-19 lockdown in Zhengzhou, with Morgan Stanley saying an opportunity to "buy the dip" has emerged.
Morgan Stanley analyst Erik Woodring lowered his fiscal 2023 revenue and earnings per share estimates by 0.3% and 0.5% to $407.7B and $6.15, noting that while the situation in the populous Chinese city is "fluid," it's likely a deferral not a demand destruction. 
"...We believe this situation equates to more of a deferral of iPhone demand than a destruction of demand, which does not change our [overweight] thesis," Woodring wrote in a note to clients. "As a result, we would be methodical buyers of the stock as it approaches 20x P/E â roughly 6.5x turns lower than its recent peak in August 2022 and in-line with its trailing 5 year average." 
Apple (AAPL) shares rose fractionally in premarket trading on Tuesday after the tech giant closed higher on Monday and erased losses tied to the announcement, made late on Sunday.
UBS analyst David Vogt lowered his first-quarter revenue and earnings per share estimates by 2% and 3%, respectively, while also cutting his iPhone unit estimate for the December quarter to 83M, down from 86.5M.
He also noted that wait times for the iPhone 14 Pro and iPhone 14 Pro Max have gone up in 30 countries, including in the U.S. - 28 days, up from 25 last week and 19 two weeks ago - and China - 26 days, up from 24 days a week ago and 18 days two weeks ago.
"While the increase in wait times are not ideal from a consumer perspective as delivery dates extend beyond Black Friday, we believe the impact is measured in the low single digits," Vogt wrote.
The lockdown in Zhengzhou is slated to expire November 9 at noon, but Bloomberg reported that COVID-19 cases have continued to rise in the city, raising the prospects for a potential extension of the lockdown.
Earlier this month, investment firm Morgan Stanley recently wondered if the decline in Apple's (AAPL) App Store could have bottomed in September.