Apple iPhone – Will Tuesday’s event help regain $200bn lost value?

Shareholder Surge, Valuation Recovery Remains Elusive

Tuesday’s Apple iPhone 15 event will boost prices for shareholders but won’t be enough to recover its stock market valuation. A valuation which declined by over 6% or close to $200 billion in two days last week.

Reports that government workers in China have been banned from using iPhones led to a drop in stock prices.

The latest iPhone showcase, ‘Wonderlust,’ will unveil new hardware on Tuesday, including the iPhone 15 and Apple Watch models.

Shareholder Expectations and Valuation Challenges

As I was quoted by Financial MirrorFinancial ExpressValue WalkMena FNBusiness Traffic and Information Age, amongst other media, these Apple events usually generate a great deal of buzz and excitement, which leads to a surge in sales. This will, in turn, hike stock prices for shareholders in the short term.

Nevertheless, we don’t think it will be sufficient to recover its full stock market valuation, which plummeted by almost $200 billion last week in just two days.

This isn’t because of the ban in China on government workers using iPhones – a greatly overstated impact.

Factors Behind Apple’s Sales Decline and Stock Price Drop

The sales decline comes simultaneously with the release of a rival phone in China, the Huawei Mate 60. The sales drop also followed Apple’s three straight quarters of falling sales due to the macroeconomic climate in the market, featuring key consumption headwinds.

These should be the principal reasons why stock prices dropped last week, not the knee-jerk reaction to a ban that only impacts around 500,000 Chinese government workers’ phones.

Therefore, as these reasons remain short-term, we think it will be tough for Apple to make up the stock market valuation loss with Tuesday’s event.

However, savvy investors will use the fall in stock price as a buying opportunity.

A ‘Buy’ Perspective for Investors

Apple’s strong fundamentals are the same. It has massive amounts of capital and expertise. Apple dominates the market and is incredibly adaptable.

Apple CEO Tim Cook sees this as Beijing viewing Apple as almost ‘independent’ from the US. Something many other major global brands haven’t managed to do.

To my mind, Apple remains a ‘buy’.

We don’t expect Tuesday’s iPhone 15 event to be momentous for Apple shareholders. Investors will use the volatility as an opportunity rather than ruling it out.

Watch the Apple event live here.

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