S&P 500 may face selling pressure as systematic funds reach full exposure
On Wednesday, Goldman Sachs analyst Michael Ng maintained a Buy rating on Apple stock (NASDAQ:AAPL), with a consistent price target of $294.00. Currently trading at $244.87, Apple’s stock sits near its 52-week high of $260.10, with analyst targets ranging from $197 to $325. According to InvestingPro data, 22 analysts have recently revised their earnings estimates downward for the upcoming period. The firm’s stance comes in response to Apple’s introduction of the new iPhone 16e, the latest iteration in the more budget-friendly iPhone SE lineup. This new model, launched on February 19, 2025, is the first significant update to the entry-level iPhone since the release of the iPhone SE 3 in March 2022. The launch comes as Apple, with its substantial market capitalization of $3.68 trillion, continues to dominate the Technology Hardware sector.
The iPhone 16e debuts as the first smartphone to incorporate Apple’s own C1 cellular modem, signaling a strategic move away from Qualcomm (NASDAQ:QCOM), the previous supplier of WiFi modems for the company. This release aligns with the rest of the iPhone 16 series, supporting Apple Intelligence both on the device and through Private Cloud Compute.
Despite the iPhone 16e’s higher-than-anticipated entry price of $599, which surpassed expectations of a sub-$500 price point based on press reports, Goldman Sachs views the launch as a positive step. The new pricing is seen as a potential driver for upgrade demand and sustained growth within Apple’s customer base, especially in markets sensitive to price. With annual revenue of $395.76 billion and trading at a P/E ratio of 38.84, InvestingPro analysis indicates the stock is currently trading above its Fair Value.
Goldman Sachs’ financial outlook for Apple remains unchanged, with the firm’s EPS estimates for fiscal years 2025, 2026, and 2027 holding steady. This decision reflects the analyst’s perspective that the iPhone 16e’s announcement met market expectations and did not necessitate a revision of Apple’s projected earnings. The analyst’s commentary highlighted the alignment of the iPhone 16e’s features and pricing with pre-launch media speculation, suggesting that the market had accurately anticipated the company’s strategic direction with its latest product offering. InvestingPro subscribers can access detailed earnings forecasts, comprehensive valuation metrics, and expert analysis through the Pro Research Report, available for over 1,400 US stocks including Apple.
In other recent news, Apple Inc. has introduced the iPhone 16e, marking a significant development with its advanced features and new pricing strategy. The iPhone 16e, priced at $599, features Apple’s first custom-designed C1 modem chip, which promises improved battery life and performance. This new chip signifies a strategic shift away from reliance on Qualcomm for modem components. The device also includes the A18 chip and a high-resolution 48MP camera, offering users enhanced photo and video capabilities. Evercore ISI has maintained its Outperform rating on Apple, with a price target of $260, reflecting confidence in the company’s market position following the iPhone 16e launch. The investment firm projects that the iPhone 16e could generate approximately $14 billion in additional sales revenue. UBS, on the other hand, has reiterated a Neutral rating with a $236 price target, noting the anticipated launch of the fourth-generation iPhone SE. This upcoming model is expected to feature an internally designed modem, further reducing Apple’s dependence on external suppliers. These developments highlight Apple’s ongoing efforts to innovate and strengthen its product lineup.
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