Jefferies downgraded Apple's stock to "sell"
The investment firm Jefferies downgraded Apple’s stock rating from “hold” to “underperform,” which corresponds to a sell recommendation. Analysts lowered the target price from $285.56 to $263.66, according to Fortune.
Jefferies attributed the decision to the results of audits of Apple’s supply chain. According to analysts, the company has scrapped development of an iPhone with an all-glass body, which had previously been rumored. It was expected to be unveiled next year, in time for the iPhone’s 20th anniversary. The firm believes that introducing new smartphone form factors to increase the average selling price is more difficult than expected.
Analysts also pointed to rising memory costs and, in their view, limited signs of Apple’s progress in the field of artificial intelligence. Jefferies predicts that the anticipated foldable iPhone may be the only factor supporting profit margins. At the same time, due to the higher cost of memory, the firm estimates that its price could reach $2,199 for the 256 GB version and $3,099 for the model with 2 TB of storage.
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According to Bloomberg’s calculations, at least six Wall Street firms have already assigned Apple a rating equivalent to a “sell” recommendation. This matches the high set in 2012. In July, KeyBanc Capital Markets also downgraded Apple to “underperform” due to concerns about iPhone demand.
Apple’s stock has been under pressure following the company’s announcement in late July that it expects iPhone sales in the current quarter to grow at a rate in the mid-teens. This would represent a slowdown compared to the 22% growth in the previous quarter. Apple also warned of pressure on its gross margin in the current quarter.
Fortune reports that, according to available data, Apple is testing memory chips from the Chinese company CXMT. Apple CEO Tim Cook previously stated that executing some AI requests directly on users’ devices is a strategic advantage for the company.
