Citi maintains Apple stock buy rating with $255 target

On Monday, Citi reaffirmed its optimistic stance on Apple Inc. (NASDAQ:AAPL) shares, maintaining a Buy rating and a price target of $255. With a market capitalization of $3.48 trillion, Apple currently trades above its InvestingPro Fair Value, while analyst targets range from $183 to $325. The endorsement comes as the tech giant prepares for the launch of the iPhone SE4 and the iOS 18.4 update, which is expected to feature a significant Siri overhaul.

Citi's analysis suggests that Apple's iPhone sales will likely follow historical seasonal trends. With annual revenue of $391.04 billion and a solid financial health score rated as "GOOD" by InvestingPro, the company maintains strong fundamentals despite market fluctuations. The firm has slightly reduced its iPhone unit forecast for the March quarter by 2 million units, aligning with supply chain insights. The revised estimates now project annual iPhone unit sales to reach 227 million, 238 million, and 250 million for the calendar years 2024, 2025, and 2026, respectively. This adjustment represents a year-over-year growth of -2%, +5%, and +5%.

The report also addressed the potential financial impact of the TikTok ban in the United States. In 2024, TikTok contributed approximately $854 million in net revenue to Apple's App Store domestically, representing about 3% of the total U.S. App Store revenue or roughly 1% globally. While the future availability of TikTok on the App Store remains uncertain, Citi analysts believe that any negative effect on Apple's App Store revenue would be minimal, translating to less than 1% of the total App Store revenue or under 0.3% of Apple's total service revenue.

Apple's upcoming product releases and software updates are highly anticipated events that could influence the company's performance in the consumer electronics market. With earnings scheduled in just 3 days, investors can access comprehensive analysis and 13 additional key insights through InvestingPro's detailed research reports. The Citi report indicates a cautious but positive outlook for Apple's near-term growth, particularly in its iPhone segment, despite the minor adjustment in sales forecasts and the potential ripple effects of the TikTok ban.

In other recent news, Apple Inc. has seen a revision in its iPhone Electronic Manufacturing Services (EMS) build plan estimates for the first half of 2025 by JPMorgan, due to increased production orders and growing demand in China. Apple's forecasted iPhone EMS build for the first quarter of 2025 has been increased by 8% to 48 million units, mainly driven by the upcoming iPhone SE4 model. However, the estimates for the second quarter remain at 38 million units, marking a 7% decline year-over-year.

In analyst adjustments, BofA Securities and Goldman Sachs revised their price targets for Apple, while Jefferies and Loop Capital downgraded the tech giant over concerns about its earnings and revenue guidance targets. Analysts predict Apple's quarter revenue to reach $126 billion, slightly above the consensus estimate of $124 billion.

An AI technology from Chinese startup, DeepSeek, has been making waves in the tech industry, topping Apple's iPhone download charts. This development could potentially alter the AI industry's competitive landscape.

Lastly, Apple, along with Alphabet (NASDAQ:GOOGL) Inc., is under investigation by the United Kingdom (TADAWUL:4280)'s Competition and Markets Authority due to concerns over their mobile market dominance. These recent developments are crucial for investors to monitor in this dynamic tech industry landscape.

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