Analyst Upgraded AAPL Target, Sees Minimal Tariff Impact on Earnings

Apple Inc. (AAPL) has received a boost from analysts at Bank of America (BAC) who upgraded their target price for the tech giant's stock, citing the company's resilience to tariff-related headwinds. The analysts believe that Apple's increased iPhone production in India has significantly reduced the company's exposure to U.S. tariffs on Chinese imports, which were imposed by the Biden administration.

According to Bank of America, approximately 80% of iPhones sold in the U.S. now come from outside of China, primarily from India. This shift in manufacturing strategy has allowed Apple to manage the impact of a 10% tariff on Chinese imports, which would have otherwise negatively affected the company's profits. The analysts maintained their Buy recommendation on Apple, expressing confidence in the company's ability to negotiate changes in trade policy.

Apple's fiscal first quarter of 2025 saw a 11% year-over-year decline in income from Greater China, indicating that the company is still feeling the impact of declining sales in the region. However, the analysts' upgraded target price reflects Apple's ability to mitigate the impact of tariffs on its earnings through strategic manufacturing decisions.



In addition to increased production in India, Apple has explored the possibility of expanding manufacturing in other countries such as Malaysia and Vietnam to further reduce the impact of tariffs. The company has also considered raising the price of its iPhones by 3% to offset the drop in profits per share expected from the tariff, which is estimated to be around $0.05.

Apple's ability to navigate the complex landscape of international trade policies and manage the impact of tariffs on its earnings has been highlighted by Bank of America, which maintained its Buy recommendation on the company despite the tariff exposure. This strategy has helped Apple maintain its position as a leading player in the global smartphone market, despite the challenges posed by tariffs and declining sales in China.

In conclusion, Apple's upgraded target price reflects the company's resilience to tariff-related headwinds, as highlighted by Bank of America's analysts. The company's strategic manufacturing decisions, including increased production in India, have allowed Apple to mitigate the impact of U.S. tariffs on Chinese imports, ensuring the company's continued success in the global market.