Apple stock receives rare downgrade to 'sell' on disappointing AI iPhone
Jan 07, 2025 - markets.businessinsider.com
Apple stock received a rare downgrade to "Sell" from MoffettNathanson, highlighting concerns over its premium valuation and recent negative headlines. The downgrade, which set a price target of $188, suggests a potential downside of 22% from current levels. Despite the stock's rise, senior analyst Craig Moffett pointed to a series of negative developments, including legal issues with Alphabet's payments, weak iPhone sales in China, and underwhelming performance of the Vision Pro headset. Moffett also noted the lackluster sales of the iPhone 16 and consumer indifference towards new AI features as significant concerns.
Moffett argues that Apple's stock is priced for perfection, which does not align with the current risk/reward profile given the challenging backdrop. The stock's valuation is near historical extremes, making it one of the most expensive among the Magnificent Seven stocks, despite having the slowest growth rate. Moffett believes that the market's upward trend has unjustifiably included Apple, as many risks have intensified since August, making the outlook for Apple's shares unattractive.
Key takeaways:
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Apple stock received a rare downgrade to 'Sell' from MoffettNathanson, citing premium valuation concerns and negative headlines.
Only four out of more than 60 analysts covering Apple have a "sell" rating, highlighting the rarity of the downgrade.
Concerns include illegal payments from Alphabet, weak China iPhone sales, and lackluster Vision Pro headset performance.
The lukewarm sales of the iPhone 16 and the stock's high valuation suggest an unfavorable risk/reward profile for investors.
