Apple Stock Slides on Wall Street Analyst Downgrades
Apple (AAPL) stock has come under pressure in recent days, with several Wall Street analysts downgrading their ratings or price targets on the stock ahead of the company’s December-quarter earnings report next week.
Investment bank Jefferies downgraded Apple stock to underperform, or sell, from hold. Loop Capital lowered its rating on Apple stock to hold from buy. And JPMorgan cut its price target on Apple.
Apple even took a hit from a prominent politician. Closely watched stock trader U.S. Rep. Nancy Pelosi disclosed that she recently sold Apple shares while increasing her holdings in other tech firms such as Alphabet (GOOGL) and Amazon (AMZN), according to news reports.
Jefferies Analyst Turns Negative on Apple Stock
Jefferies analyst Edison Lee turned negative on Apple stock based on indications of “weak” iPhone sales, especially in China.
In a client note Monday, Lee said he thinks Apple will miss estimates for its fiscal first quarter and with its guidance. Apple will report fiscal Q1 results on Jan. 30.
Sales estimates are too high for current iPhones and upcoming handsets because of the slower-than-expected rollout and uptake of AI features, branded Apple Intelligence, Lee said.
“Current expectations for Apple Intelligence to kick-start a super upgrade cycle are too high, in our view,” Lee said. “Apple Intelligence rollout is likely to be gradual.”
He added, “Consumers are not yet interested in AI on smartphone, and hardware upgrade to enable smarter AI is expensive and could lead to further delay in AI scaling up to drive iPhone sales.”
Loop Capital Downgrades Apple Stock on Soft iPhone Demand
Loop Capital analyst Ananda Baruah said he downgraded Apple stock on signs of “materially softening iPhone demand.”
In a client note on Tuesday, Baruah said generative AI features have not boosted iPhone 16 sales.
“Frankly speaking, the Apple Intelligence rollout has been dismal, according to all accounts,” Baruah said. “The new Siri promised is rife with issues and user experience has been extremely disappointing. The AI features to aid in writing have been received equally as poorly.”
JPMorgan Maintains Overweight Rating But Cuts Price Target
Elsewhere on Wall Street, JPMorgan analyst Samik Chatterjee maintained his overweight, or buy, rating on Apple stock but lowered his price target to 260 from 265.
On the stock market today, Apple stock fell 3.2% to close at 222.64.
“The concern heading into the earnings print is less about the quarter itself, and more so about the outlook,” Chatterjee said in a client note.
He cited several concerns for Apple including smartphone market share loss in China, limited traction for AI features, and foreign exchange headwinds.
Apple Faces Challenges Ahead
The analyst downgrades and lowered price targets come as Apple faces a number of challenges, including the uncertain economic outlook, slowing iPhone sales, and increasing competition from rivals such as Samsung and Huawei.
Apple is expected to report its fiscal first-quarter results on Jan. 30. Investors will be closely watching the report for any signs of weakness in the company’s business.
