On Monday, Analysts from Jefferies lowered their Apple rating to “underperform“, citing that iPhone sales weren’t doing well and AI wasn’t growing as fast as expected, which would hurt the company’s profits. Following forecasts that Apple will not meet Q1 2025 revenue targets, Jefferies downgraded the stock to Underperform. Jefferies cut their AAPL stock price target to $200.7, down 13% from its previous view of $211.8, following the latest AAPL market close.
According to the findings, both iPhone 17 and 18 performed below expectations, AI adoption grew more slowly than hoped, and Apple expected iPhone market share to decrease by 2% in Q1 2025. China’s cut to device subsidies will lead to reduced iPhone demand in 2023. The iPad and MacBook product line, along with Apple products in general, is performing badly as sales in consumer electronics continue to drop.
Jefferies warned that Apple’s delayed work on advanced packaging systems could limit how well it can integrate AI features into future iPhone models. According to analysts, Apple’s earnings per share numbers have been reduced by 2% to 23% across the next three years, with forecasts showing that EPS will decrease by 4% from FY25 until FY26.
This article first appeared on GuruFocus.