Demand for Apple's (NASDAQ: AAPL) higher-priced iPhone 14 Pro and 14 Pro Max remains elevated, according to Canaccord analyst T. Michael Walkley.
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In a note released Tuesday, Walkley told investors said the strong demand has led the firm to slightly lower its estimates, with supply potentially being an issue for the tech giant. Various reports previously stated that demand for the higher-priced iPhone 14 models was weak; however, in the last few weeks, some analysts have pointed to supply as the bigger issue.
The analyst reiterated his Buy rating and $200 per share price target on Apple.
Walkley added that Covid-19 restrictions in China are adversely impacting the iPhone 14 Pro and Pro Max assembly, and he anticipates demand will outstrip supply into the March quarter.
Meanwhile, on Monday, JPMorgan analyst Samik Chatterjee said lead times for Apple's iPhone Pro models have either remained elevated or lengthened slightly compared to last week, noting that delivery dates are “inching towards January 2023 as opposed to consumers being able to receive any new orders in the remaining days of 2022.”
Chatterjee, who maintained an Overweight rating on Apple, said delivery times being 17 days higher than the lowest lead times seen four weeks ago indicates that challenges related to an ongoing Covid-19 outbreak in Zhengzhou, China, are continuing, but the limited expansion of lead times “could be an indicator of cycling past the trough in terms of supply.”
Last week, Evercore ISI told investors in a note that they believe a short extension in lead times is “unlikely to cause consumers to exit,” and they expect demand to be deferred, not lost.
Apple shares gained 1.47% during Tuesday's session. However, in 2022, the stock is down 15.55%, despite the recent share price gains.
