According to a Wednesday report by Nikkei Asian Review, Apples key suppliers have been asked to evaluate the cost implications of relocating 15% to 30% of their production capacity from China to Southeast Asia.
The locations being taken into consideration include India, Indonesia, Mexico, Malaysia and Vietnam.
Apple shares closed lower for the fourth time in the past twelve trading sessions on NASDAQ on Wednesday. The stock edged down 0.29% ($0.58) to $197.87, after touching an intraday high at $199.88 and an intraday low at $197.41.
Shares of Apple Inc have added 25.44% to their value so far in 2019 compared with a 16.74% gain for the benchmark index, S&P 500 (SPX).
In 2018, Apple’s stock went down 6.79%, thus, it underperformed the S&P 500, which registered a 6.24% loss.
The news came at a time, when the tech giant prepares to restructure its supply chain.
According to the report, Apple has concluded that the risks of relying heavily on Chinese manufacturing are too high and even increasing.
Apple has asked iPhone assemblers Foxconn, Wistron Corp and Pegatron Corp, MacBook producer Quanta Computer Inc, AirPods manufacturers Luxshare-ICT, Goertek and Inventec Corp as well as iPad producer Compal Electronics Inc to assess manufacturing options outside of China.
The report stated that over 30 members of Apples capital expense studies team had been discussing production plans with suppliers and governments along with monetary incentives, which could potentially attract Apple manufacturing.
Nikkei also reported that the suppliers had no specific deadline to finalize their business proposals. On the other hand, once a location is chosen, it could take at least 18 months for manufacturing to commence, the report stated.
According to CNN Money, the 35 analysts, offering 12-month forecasts regarding Apple Inc’s stock price, have a median target of $212.00, with a high estimate of $245.00 and a low estimate of $150.00. The median estimate represents a 7.14% upside compared to the closing price of $197.87 on June 19th.
The same media also reported that 20 out of 41 surveyed investment analysts had rated Apple Inc’s stock as “Buy”, while 17 – as “Hold”. On the other hand, 3 analysts had recommended selling the stock.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Apple Inc (AAPL) are presented as follows:
Central Pivot Point – $193.28
R1 – $196.25
R2 – $199.77
R3 – $202.74
R4 – $205.72
S1 – $189.76
S2 – $186.79
S3 – $183.27
S4 – $179.76
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