Apple stock App Store growth slows in June, UBS maintains neutral rating

Investing.com - UBS maintained its Neutral rating and $210.00 price target on Apple (NASDAQ:AAPL) stock after analyzing recent App Store performance data. According to InvestingPro data, Apple currently trades at a premium valuation with high EBITDA and revenue multiples, while analyst targets range from $173 to $300.

The investment firm reported that App Store growth slowed approximately 70 basis points month-over-month to about 10% on a foreign exchange neutral basis in June, according to data from Sensor Tower. This comes as Apple’s overall revenue growth reached 4.9% in the last twelve months, with the company maintaining strong profitability metrics and an impressive return on assets of 29.1%.

On a reported basis, growth reached approximately 12% as the U.S. dollar weakened during the quarter, UBS noted in its analysis.

Growth rates were relatively consistent between the United States (approximately 12%) and the rest of the world (approximately 13%) on a reported basis, though the comparative baselines differed significantly at roughly 18% in the U.S. versus approximately 10% in other markets.

Looking ahead to the September quarter, UBS indicated that Apple faces a comparison baseline of roughly 12%, which is one percentage point easier than the June quarter comparison. With earnings scheduled for July 31st, InvestingPro offers 14 additional key insights about Apple’s financial health and market position, available in the comprehensive Pro Research Report.

In other recent news, Apple has been at the center of several notable developments. KeyBanc has maintained its Sector Weight rating on Apple, adjusting its quarterly estimates based on spending data. The firm raised its fiscal third-quarter estimates above consensus but lowered its fiscal fourth-quarter projections. Meanwhile, Evercore ISI reiterated an Outperform rating and a $250 price target on Apple despite the departure of a key AI executive, Ruoming Pang, who left for Meta (NASDAQ:META). The leadership changes in Apple’s AI division have reportedly impacted team morale, yet Evercore ISI views Apple’s AI strategy as flexible and cost-conscious.

Goldman Sachs has also maintained its Buy rating and a $253 price target on Apple, despite challenges in the Chinese smartphone market. Data showed a 10% year-over-year decline in foreign-branded phone shipments in China, though Apple managed to increase its market share through strategic discounting. Additionally, Apple has filed a legal challenge against a $587 million fine imposed by the European Union for allegedly breaching the Digital Markets Act. The company argues that the EU’s decision oversteps legal requirements and plans to contest the ruling in court.

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