Craig Moffett, a well-regarded analyst, has expressed skepticism about the feasibility of moving Apple's (AAPL, Financial) iPhone assembly operations from the U.S. to India. Following reports that Apple plans to shift production to India by the end of next year, Moffett raised doubts about the potential cost savings, particularly concerning tariffs, as iPhone components would still be produced elsewhere.
Moffett, a partner and senior managing director at MoffettNathanson, noted in a CNBC interview that while diversification to India might offer some benefits, it does not resolve all issues related to tariffs. He emphasized that Apple's supply chain would still face challenges and resistance.
In a note to clients, Moffett highlighted that global trade tensions impact both costs and sales, and relocating assembly to India might only address cost issues, while sales could face bigger challenges. Consequently, he lowered Apple's target stock price from $184 to $141, marking a 33% drop from the previous close and the lowest forecast on Wall Street according to FactSet data.
Moffett has maintained a "sell" rating on Apple since January 7, with the stock declining about 14% since then. He attributes this not to Apple's performance, which boasts a strong balance sheet, but to valuation concerns amid high tariffs and potential consumer demand slowdown.
