Key Takeaways
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Jefferies downgraded Apple to “hold” from “buy,” saying expectations for sales of the iPhone 16 and 17 are too high.
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However, the bank raised its price target by nearly $8.
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The analysts told clients in order to have “serious” artificial intelligence capabilities, smartphone hardware needs to be reworked.
Apple (AAPL) shares lost ground Monday after Jefferies downgraded the stock, arguing that the anticipated sales of iPhones are too high.
The bank cut Apple’s rating to “hold” from “buy,” although it raised its price target to $212.92 from $205.00.
The analysts wrote in a note to clients that “smartphone hardware needs rework before being capable of serious AI, with likely timeline of 2026/27.”
Apple iPhone Sales Expectations ‘Premature’
They added that “high expectations for iPhone 16/17 are premature.”
The analysts pointed out that their outlook for Apple’s fiscal 2024 fourth-quarter net sales is less than the Wall Street consensus, and that the tech firm’s 33 times full-year estimated adjusted price-to-earnings (P/E) ratio is near an all-time high.
Shares of Apple fell less than 1% Monday morning but are up 17% year-to-date.
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