Apple Downgrades Stock to Sell Ahead of Earnings

Apple (AAPL) Stocks trade higher on Friday despite downgrading financial services firm KeyBanc 7 amazing stocks Switching from Standard Weight (equivalent to Hold) to Underweight (equivalent to Sell) with a $200 price target.

Apple has been one of the best performers in 2024, up 34% year-to-date. Dow Jones shares. But KeyBanc analyst Brandon Nispel is worried about iPhone 16 sales. He thinks customers will prefer to buy the new lower-priced iPhone SE model, which is expected to be released in early 2025, rather than the more expensive iPhone 16. Barron’s.

While the price of the iPhone 16 varies between $799 and $1,199, the price of the iPhone SE 4 is expected to be around $499. according to some estimates.

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Nispel cited a recent survey that found 59% of respondents said they were interested in upgrading to the iPhone 16, and 61% of those likely or very likely to upgrade were interested in the iPhone SE.

“This suggests that iPhone SE is not incremental and could possibly cannibalize iPhone 16 sales,” the analyst said, adding that a successful launch of iPhone SE would lead to an increase in iPhone units sold but a decrease in average sales. prices.

Nispel’s $200 price target represents a discount of approximately 14% from current levels.

Apple could succeed in China’s booming smartphone market

In a positive development for Apple, it posted its fourth consecutive quarter of growth, with smartphone shipments in China rising 3.2% year-over-year in the third quarter. International Data Corporation Worldwide Quarterly Cell Phone Tracker.

Apple ranked second among smartphone companies with the launch of the new iPhone 16 series, and its artificial intelligence (AI) model Apple Intelligence is expected to drive future demand.

“A significant wave of device upgrades supports the sustainable recovery of the Chinese smartphone market,” said IDC senior research analyst Arthur Guo he said in a statement. “Despite ongoing economic challenges, consumers remain highly motivated to purchase new smartphones after three years of pent-up demand.”

Apple still a buy for much of Wall Street

The majority of Wall Street remains bullish on the blue chip, suggesting investors shouldn’t worry too much about KeyBanc’s downgrade. Warren Buffett’s favorite stocks.

Accordingly S&P Global Market IntelligenceThe average analyst target price for AAPL stock is $239.82, representing an implied upside of over 3% from current levels. Additionally, the consensus recommendation is Buy.

Financial services company CFRA is one of the most bullish on AAPL shares, with a Buy rating and a $260 price target.

CFRA Research analyst looks forward to Apple’s upcoming earnings event scheduled for after the close on Thursday, October 31 Angelo Zino expects 13% year-over-year growth in services and “anticipates more information on the rollout of AI (initially only available in English) and expects international expansion to be a bigger story in calendar year 2025 and calendar year 2026.”

Zino adds that “AAPL may refresh its Macs with onboard M4 processors this fall, while Wearables will return to growth given recent upgrades to its Watch and AirPods product lines.”

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