This is How the Coronavirus Could Affect Apple Shares

iPhone maker Apple has closed 42 stores until at least February 9th on the heels of the coronavirus spreading in China.
The tech giant revealed the news over the weekend and said it had temporarily shut the stores down in mainland China as the country fights the coronavirus outbreak.

According to Citi estimates, the company’s worst case scenario would be if sales in China go to zero.

“Each week of no China sales is $850 million of sales or a reduction of -1.3%,” Citi said.

“Should the situation elongate to a month it would represent $3.4 billion or a reduction of -5.2% [for Apple’s total sales],” Citi said in a note to investors.

Apple’s recent revenue forecast “incorporated some degree of headwinds from these issues.” Evercore ISI has said, “so likely we think AAPL is one of the more de-risked models.”

Evercore ISI has also noted that about half of Apple’s 775 supply vendors are also in China.

Apple said its online store would remain open but Citi pointed out that deliveries may be curtailed. Citi also pointed out that Apple’s China stores have an significant impact on its total sales, with the country making up 17% of Apple’s total sales.

It was on Monday that TF International Securities analyst Ming-Chi Kuo slashed his iPhone shipment forecast for the first quarter of this year by 10%, citing the coronavirus.

″Our latest survey indicates that the iPhone supply is being affected by the coronavirus and, therefore, we cut the iPhone shipment forecasts by 10% to 36-40 mn units in 1Q20,” Kuo said

“We see the coronavirus impact on AAPL as a dynamic that continues to gain in importance to the company, though we size the present impact to be relatively minimal, financially,” Deutsche remarked.

Economist Mohamed El-Erian recently warned investors and said about the coronavirus, “It is big. It’s going to paralyze China. It’s going to cascade throughout the global economy.”

Disclaimer: We have no position in Apple Inc. (NASDAQ: AAPL) and have not been compensated for this article.