Wall Street analysts target 4 Club stocks. Here’s our take on the updates

Published Tue, Nov 22 20222:56 PM ESTUpdated Tue, Nov 22 20223:35 PM EST

Wall Street analysts put four Club holdings — Apple (AAPL), Amazon (AMZN), Procter & Gamble (PG) and Honeywell (HON) — under the microscope Tuesday. Here are the key analyst updates, along with our take for each. Apple Analyst take: Canaccord slightly lowered iPhone revenue estimates for Apple's fiscal 2023, to $199.7 billion from $206 billion. While demand for Apple's higher-end iPhone models, the 14 Pro and 14 Pro Max, remain at "elevated levels," the bank expects some sales to be lost in the fiscal first quarter, ending in December, before iPhone availability improves in its fiscal second. Canaccord believes demand will outweigh supply, even as China's zero-Covid policy is "adversely impacting" iPhone assembly. The firm reiterated its buy rating on the stock and a price target of $200. Club take: While China's draconian Covid restrictions have weighed on Apple's iPhone production, we continue to maintain that this is a temporary issue that will improve once Beijing fully reopens its economy. We recognize this supply chain complication could impact sales and may take another quarter to improve, but we're encouraged by the fact that demand for Apple's iPhones is resilient despite the elevated lead times. We reiterate our Apple mantra — "own it, don't trade it" — and believe any losses incurred in the current quarter can be made up in quarters to come. Amazon Analyst take: Piper Sandler on Tuesday lowered Amazon's price target to $119 from $125, citing the company's slowing cloud business , but kept an overweight rating on the stock. The slowdown at Amazon Web Services (AWS), the cloud division, is an industry-wide phenomenon, analysts at Piper Sandler wrote in a note. But they called AWS an "industry leader," with roughly 50% of market share among the four largest cloud companies. Piper Sandler expects revenue and operating income to decline by 2% in the fourth quarter and come down by 4% in 2023. Club take: We continue to see Amazon's cloud business as the industry leader that repeatedly outperforms peers. We recognize AWS may continue to face challenges in a slowing economy where customers are tightening budgets. But at the same time, Amazon has been reining in costs, most recently by making the difficult decision to lay off thousands of employees. Amazon CEO Andy Jassy told staff last week that layoffs will continue into next year as the company focuses on managing costs. Procter & Gamble Analyst take: Wolfe Research initiated coverage of Procter & Gamble (PG) Monday with an outperform, or buy, rating and price target of $156. "P & G's brand portfolio has delivered strong demand elasticities to date as they innovate and reinvest in the brands. We view their geographic exposure and balance sheet as defensive, which should support fund flows as investors flee to safety," the analysts wrote in a note. They credit management with "efforts to streamline their portfolio while reinvesting in marketing/innovation." While Wolfe analysts have some concerns that P & G's product portfolio skews to more premium brands, they believe consumer balance sheets and wage growth are strong enough to support continued demand. Club take: The Wolfe Research note is in line with our own view. We have previously called out P & G's investments in innovation as a key factor behind sustained demand, even as consumer balance sheets tighten. Management is addressing the tighter spending environment in two ways: On the one hand, they are offering up attractive prices on a per-unit basis for those consumers willing and able to buy in bulk. At the same time, they are offering up more economical options for cash-strapped customers. As inflation moderates, we expect profit margins to improve, as selling prices sustain and input costs come back down. We continue to like P & G, especially amid the current economic uncertainty. Honeywell Analyst take: In a note Tuesday, JPMorgan called out Honeywell's "underappreciated technology franchise." Specifically, the research focused on Honeywell's UOP subsegment, which refines oil products and manufactures petrochemicals. This business does much more for Honeywell than provide "merely commodity 'fossil' exposure," analysts wrote. JPMorgan projects UOP's sustainability technology solutions (STS) unit will be roughly 25% of 2024 UOP sales, calling it a "prime example of a technology portfolio essentially baked from scratch in a short period of time." STS includes exposure to renewable energy, sustainable fuels and green hydrogen technologies. Club take: Though Honeywell may be classified as an industrial company, it is more of a tech stock focused on the industrial sector. As we saw with third-quarter results , Honeywell management knows how to effectively operate in an uncertain economic environment. With next year expected to see organic growth in aerospace, performance materials and technologies, and building technologies — due to record levels of demand and a robust backlog — we think the company is setup for a strong 2023. (Jim Cramer's Charitable Trust is long AAPL, AMZN, PG, HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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Analysts have been debating the demand for Apple's iPhone 14 models amid a backdrop of rampant inflation, rising interest rates and fears of a global recession.

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