At Extreme Investor Network, we strive to provide our readers with unique and valuable insights into the world of investing. Today, we are taking a closer look at recent data surrounding Apple and its iPhone sales.
According to KeyBanc Capital Markets analyst Brandon Nispel, recent consumer survey data points to a lack of growth for Apple. Nispel downgraded the tech giant to underweight from sector weight, with a price target of $200 reflecting more than 13% downside potential. This news caused shares to fall nearly 1% in premarket trading, despite the stock soaring nearly 20% year-to-date.
One of the key factors in Nispel’s analysis is the impact of the iPhone SE on overall iPhone sales. The survey revealed that 59% of respondents are interested in upgrading to the iPhone 16, with 61% of those likely to upgrade also showing interest in the iPhone SE. This raises concerns that the iPhone SE may not be purely additive and could potentially cannibalize iPhone 16 sales.
Looking ahead, Nispel is not optimistic about the prospect of higher upgrade rates in the U.S. In fact, he anticipates a decrease in upgrade rates in the fourth quarter and first half of 2025. Additionally, Nispel believes that an inflection across Apple’s product categories is unlikely to occur in the near future.
One of the factors contributing to Nispel’s cautious outlook is Apple’s expensive valuation, with a forward price-to-earnings ratio of about 34.4. Despite this, he is the only analyst covering the stock with an underperform-equivalent rating, as 35 out of 48 analysts rate Apple as a buy or strong buy, with another 12 giving it a hold rating.
While some analysts remain bullish on Apple’s prospects, Nispel’s insights provide a valuable perspective on potential challenges facing the tech giant in the coming months. Stay tuned to Extreme Investor Network for more unique and insightful analysis on the latest trends in the investing world.