Jefferies cuts Apple stock ranking on anticipated | Inventory Information
Investing.com — Jefferies analysts downgraded Apple (NASDAQ:) stock to Underperform from Maintain on Monday as they count on the tech giant to overlook each earnings and steerage targets in its upcoming fiscal Q1 2025 report. Their price goal on Apple stock was additionally lowered to $200.75 from $211.84, implying a 13% draw back from the present ranges.
The bearish expectations come amid weak iPhone gross sales and a subdued outlook for iPhone 17 and 18 on account of “slower AI uptake and commercialization,” analysts mentioned in a notice.
They project Apple to fall short of its income growth steerage of 5% for the primary quarter and to information to solely low single-digit income growth within the second quarter, additionally under consensus.
Jefferies has lowered their forecast for iPhone shipments from a 1% growth to a 2% decline for the primary quarter of fiscal 12 months 2025, based mostly on knowledge indicating a roughly 4% year-over-year lower in iPhone shipments during this period, in response to the Worldwide Knowledge Company (IDC).
The sell-through of iPhones in China during the identical quarter is reported to have dropped considerably, whereas worldwide markets may see marginal growth. Moreover, the outlook for different Apple merchandise akin to iPads and MacBooks is bleak due to the general weak spot within the shopper electronics market.
The downgrade additionally displays issues over the March quarter steerage, which analysts imagine may disappoint traders. Regardless of optimism about demand in China on account of authorities subsidies, new insurance policies will restrict these subsidies, successfully excluding most iPhone fashions.
“We also believe demand for SE4 may be weaker than expected, since it will likely compete not so much with Android or iPhone 14/15, but used iPhone 13/14 P/PM,” analysts led by Edison Lee famous.
“We do not think consumers would be attracted to SE4 owing to Apple Intelligence, especially in China,” they added.
Furthermore, Jefferies’ staff means that the near-term outlook for AI in smartphones is subdued, as a third-party survey signifies that US shoppers don’t discover smartphone AI significantly helpful.
Trade checks additionally raise the likelihood of delays in Apple’s superior packaging roadmap, which is essential for enhancing AI capabilities on the iPhone. This uncertainty is attributed to slower AI monetization, which may dampen expectations for a important improve cycle pushed by AI.
“Even if iPhone has new form factors in the next 2 years, volume growth will likely be slower if AI takes longer to materialize,” analysts defined.
In gentle of these elements, they’ve cut its earnings per share (EPS) forecasts for Apple by 2% to 23% over the following three years, with FY25 and FY26 EPS estimates now roughly 4% under consensus.
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