Apple Inc AAPL

Apple: We're Comfortable With Our Thesis in Light of Antitrust Lawsuit

We maintain our $160 fair value estimate, medium uncertainty rating, and wide moat rating for Apple after the company was hit with an antitrust suit from the US Department of Justice. We are not surprised by the suit, as it had been rumored for months and follows similar action against other large technology firms like Alphabet's Google. We also don’t foresee the suit resulting in a significant demolition of Apple’s business or wide moat. In our base case, we assume the suit will result in some opening up of Apple’s walled garden ecosystem, similar to what we expect from the European Union's Digital Markets Act. We continue to believe that most Apple users opt in to the firm’s premium closed ecosystem, and we don’t foresee significant attrition from Apple’s products and services even under a more open environment. The shares dipped more than 3% intraday in March 21 trading, a stark difference from other technology stocks' positive performance. We see Apple as fairly valued.