Antitrust lawsuit brought by the U.S. Department of Justice apple (AAPL) faces a long battle through the court system, but Wall Street analysts say the consumer electronics giant has a good chance of winning the case. Apple stock rose on Friday.
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Evercore ISI analyst Amit Daryanani said in a note to clients that antitrust litigation is likely to pose “more than a financial risk” to Apple. “It's definitely going to be a long process that will generate some negative headlines, but we think Apple will win in the end.”
“Under existing law, it is very difficult to use market definitions or consumer harm standards to argue that Apple has a monopoly,” he said.
Daryanani estimated that the case could take two to three years to reach its initial conclusion, and then the appeals process could take another year.
“The first round of litigation is up to the judges, but the higher up the current Supreme Court is, the more business-friendly the courts are, so it will be difficult for the Justice Department to make it to the top of the court system,” he said. said.
Daryanani reiterated his outperform rating on Apple stock and set a price target of $200.
Apple stock regains lost ground
On Thursday, Apple shares fell 4.1% to close at 171.37 after the Department of Justice filed charges against the company.
However, on the stock market today, Apple stock rose 0.5% to close at 172.28.
The Justice Department accused Apple of violating antitrust laws with its restrictive iPhone and App Store policies. The complaint alleges that Apple's actions make it harder for Americans to switch to smartphones, hurt app innovation, and impose extraordinary costs on developers, businesses, and consumers.
Apple said in a statement that the antitrust lawsuit is misguided.
“We believe this lawsuit is wrong based on the facts and the law, and we will vigorously defend it,” the company said in a statement.
If the Justice Department succeeds, Apple said it would have a negative impact on the technology industry.
“If successful, it would hinder our ability to develop the kind of technology people expect from Apple at the intersection of hardware, software, and services. It would also set a dangerous precedent, allowing governments to control people's “This will have a profound impact on the design of technology,” Apple said.
This incident will cause headaches for years.
Wedbush Securities analyst Daniel Ives believes the antitrust lawsuit will have minimal impact on Apple.
“Overall, we think the chances of the Department of Justice winning here are low (less than 20%), but this large-scale lawsuit from the Belt and Road is likely to cause headaches for Apple for years to come. It's clear,” he said.
Ives said if the federal government succeeds in proving the case, the end result would likely be fines and business changes, but the company's bottom line would not be affected much.
Ives maintains an outperform rating on Apple stock and a price target of 250.
Antitrust litigation called “distraction”
JPMorgan analyst Samik Chatterjee dismissed the impact of the antitrust lawsuit.
“While we expect most investors will downplay the potential for material changes to the company's financial outlook, they will undoubtedly remain distracted and push the stock price higher until the process is complete,” he said in a note to clients. It's going to push it up,” he said.
Chatterjee is overweight on Apple stock, with a price target of 215.
Follow Patrick Seitz on X (formerly Twitter). @IBD_PSeitz Check out more articles on consumer technology, software, and semiconductor stocks here.
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