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At this point, the Huawei ban in the United States and its ripple impact have been front and center, the “poster child” for the U.S.-China trade war. Apple Inc. (NASDAQ: AAPL) has felt the sting as well with its production overseas. Despite the ongoing trade war, one analyst has a surprisingly bullish take on Apple.

Wedbush issued an Outperform rating with a $235 price target, which given a closing price of $179.66 implies upside of about 31%.

The firm continues to strongly believe that, for a company that employees over a million Chinese workers with its flagship Foxconn factory and is a major strategic player within the China technology ecosystem, from a supply chain perspective Apple will not have major roadblocks ahead despite the loud noise.

Taking a step back, Wedbush believes there is a low likelihood that Apple and its iPhones feel the brunt of the tariffs given its strategic importance domestically, as well as Cook’s ability to navigate these issues in the past with Trump and K Street. The firm believes the more concerning issue is around any hit in demand if Apple feels the noise in China and any pro-Huawei sentiment/Chinese nationalism negatively affecting sales in the near term, which it believes is a contained situation (3% to 5% of Chinese iPhones) for Cupertino the way things stand today.

Wedbush detailed in its report:

Apple and Cook are seeing pressure on both ends of the spectrum from a supply and demand perspective given the company’s flagship Foxconn factory represents the hearts and lungs of the Cupertino iPhone franchise and it employs 1.4 million in the region while China represents a growth linchpin region for the company thus representing 20% of all iPhone upgrades over the next 12 to 18 months. However, with iPhones currently exempt from this latest round of stepped up tariffs IF the Trump administration decides to levy a tariff on the additional $325 billion of Chinese goods over the coming weeks/months this would be more of a potential game changer from the perspective of the incremental costs to Apple and its iPhone production with expenses that could escalate by roughly 10%+ over time in a more draconian scenario.

Shares of Apple closed Friday at $178.97, in a 52-week range of $142.00 to $233.47. The consensus price target is $216.17.

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