For the first time in three years, Apple (AAPL.US) KeyBanc was lowered to “reduced holdings” due to “unrealistic” expectations

Zhitongcaijing · 10/25 13:25

The Zhitong Finance App learned that KeyBanc Capital Markets said that it is unrealistic to expect a full rebound in all of Apple's (AAPL.US) businesses. Analyst Brandon Nispel (Brandon Nispel) downgraded the tech giant's stock rating from the same level as the industry, saying the previous assumption was “too aggressive,” that is, the company will record the highest growth rate in more than three years, and at the same time, there will be a major shift in business. This is the first time the agency has been bearish on Apple since it covered the stock three years ago.

“Apple is an impressive business, and we believe it is unrealistic to expect a return to accelerated growth across all product categories and regions,” Nispel wrote in a report released after the market on Thursday. As of press time, the stock was down 0.3% in the premarket.

Among analysts tracked by Bloomberg, 39 people are currently recommending buying the stock, 18 recommending holding it, and 3 recommending selling it. Nispel's new price target is $200, which is one of the lowest price targets on Wall Street, which means Apple's stock price will drop 13% from Thursday's close.

The third-quarter earnings reports of the Big Seven US stocks are being released one after another, and Tesla (TSLA.US)'s impressive performance has set off. Apple will release its earnings report on October 31, and iPhone sales revenue is expected to grow after two consecutive quarters of decline. According to Counterpoint Research data, iPhone 16 sales in China increased 20% over the 2023 model in the first three weeks, showing good signs.

Although the market expects Apple's revenue to accelerate in all product categories and regions next year, Nispel is less optimistic. Citing historical data, the analyst notes that Apple has grown simultaneously in all fields only once in the past 10 years, and only twice in the past 20 years. From a geographical perspective, the company's business has grown only three times in all five regions in the past ten years.

“Although Apple seems likely to achieve this feat, in our opinion, it is difficult to achieve,” Nispel said.

Foreign media reported earlier that Apple is about to produce an updated iPhone SE, and the company hopes this overhaul will help it compete in the low-end smartphone market.

However, Nispel notes that data from a recent consumer survey conducted by KeyBanc shows that this improvement may not generate a net increase in iPhone 16 sales. Although the interviewees had a strong desire to upgrade the iPhone 16, they also showed interest in the iPhone SE.

Nispel said, “We think investors are overly optimistic about iPhone SE sales because our research shows that the iPhone SE is more like a peer-to-peer.” “Given that Apple's stock price has a large premium over historical levels, peers, and the overall market, we think the stock may not perform well and need to significantly exceed expectations to rise, and we don't think this will happen.”