Friday Jan 5 2024 13:42
3 min
Just four days into 2024, Apple shares have received their second downgrade of the year.
Piper Sandler analyst Harsh Kumar downgraded his rating on the tech giant from overweight to neutral, citing concerns about valuation and pressures in the smartphone market.
Kumar said he was worried about handset inventories in the first half of the year, predicting that growth rates for unit sales have peaked — a significant concern as iPhones make up about half of Apple’s revenue.
Despite posting growth in the iPhone market segment in the September quarter, sales for the category declined in two of the four quarters of Apple's latest fiscal year. Kumar also raised concerns about China's "deteriorating macro environment" impacting the handset business and noted potential distractions for investors with legal issues surrounding the Apple Watch and other areas.
With Apple shares trading at approximately 29 times forward earnings, above the five-year average multiple of around 24, Kumar lowered his price target from $220 to $205 in the latest report.
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This downgrade follows one from Barclays analyst Tim Long on Tuesday, who shifted to an underweight rating from a prior rating of neutral. Apple shares were down 0.7% at $180.60 in premarket trading Thursday after declines in the previous three full trading days.
The Apple share price is now down over 5.5% year-to-date, after growing by over 40% over the past year.
Kumar also downgraded shares of Microchip Technology (down 1.38% at the time of writing), Macom Technology Solutions Holdings (-3.46%), Qorvo Inc. (-2.55%), Skyworks Solutions (-1.89%,) and Akoustis Technologies (-2.74%) to neutral from overweight, reflecting his concerns about the smartphone market.
However, Kumar took a positive stance on shares of Micron Technology Inc. (+0.55%), citing potential for accelerated pricing benefits. He noted that South Korean rivals cutting production should help rebalance industry supply and demand. Micron’s stock was up about 1% in Thursday’s premarket action as Kumar upgraded his rating to overweight from neutral, with a raised price target of $95 from $70.
According to 31 analysts surveyed by TipRanks that offered 12-month Apple share price targets, the consensus forecast for AAPL shares last stood at $202.50 — a potential 11.32% upside from its current price as of January 5, 2024.
The highest listed Apple share price forecast on the platform was $250.00, while the lowest was listed at $150.00. Of the 31 analysts surveyed, 22 offered a Buy rating on APPL stock, while 8 had it as a Hold, and one gave it a Sell rating.
When considering shares for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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