Apple gets a downgrade from Loop Capital on fears of slow iPhone sales
Apple is on pace to fall short of revenue expectations tied to its iPhones, so investors should think twice before adding exposure to the tech giant, according to Loop Capital. The investment firm downgraded Apple to hold from buy. It also lowered its price target on shares to $330 from $370, suggesting about 4% downside from Monday’s close. “We continue to like AAPL’s longer-term share gain and Services story … but believe the stock also requires a fundamental catalyst reset after its recent stock appreciation … particularly given its trading at 5 year valuation high’s as iPhone ships have been reduced,” analyst Ananda Baruah said Monday in a note to clients. Shares of Apple have jumped 26% year to date as the company has enhanced its artificial intelligence and cloud technology integrations and bolstered subscription revenue across its ecosystem. That gain has pushed the stock’s valuation to a five-year high at 36 times price-to-earnings, according to Loop. AAPL YTD mountain Shares of Apple are up 26% year to date. However, the stock is unlikely to sustain that momentum due to sluggish sales of its latest mobile phones, the iPhone 18 Pro and Pro Max, per Baruah. “The gist is that when AAPL previously reduced its Sep Q & Dec Q iPhone unit ships by 10% we believed they would be in a position to make up many (if not most) of these units through CY2027 as the reductions were supply related (memory & processors) & not demand related,” Baruah wrote. “This no longer appears to be the case.” Loop Capital’s goes against the consensus on Wall Street. Of the 43 analysts covering Apple, 25 have a buy or strong buy on the stock, while 14 have a hold rating on it, LSEG data shows. Apple shares slipped around 1% following the downgrade.
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