U.S. stocks edge higher; solid earnings season continues
Investing.com - Jefferies has upgraded Apple (NASDAQ:AAPL) stock rating from Underperform to Hold, while raising its price target to $188.32 from $170.62. The tech giant, currently trading at $207.86 with a market capitalization of $3.11 trillion, shows signs of being overvalued according to InvestingPro Fair Value analysis.
The research firm expects Apple to exceed consensus estimates in the June quarter, projecting revenue growth of approximately 8% and earnings per share growth of about 10%. These figures would surpass Apple’s own guidance for low-single-digit revenue growth. With the next earnings report due on July 23, 2025, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which offer deeper insights into Apple’s financial health score of GOOD and its current P/E ratio of 32.35.
Jefferies attributes the improved outlook to tariff-driven pull-in demand and market share recovery in China. These factors are expected to help Apple outperform consensus expectations by roughly 5% on revenue and 9% on earnings per share.
Despite the upgrade, Jefferies forecasts flat iPhone unit growth in the second half of calendar year 2025. The firm cites demand that was pulled forward into April and May, along with a lack of new features for the iPhone 17.
Jefferies also expressed concern that the market’s view on tariffs may be "overly optimistic" and warned of potential downside to Apple’s service revenue, though it believes a strong fiscal third quarter could keep the stock stable in the near term.
In other recent news, Apple has been actively involved in several significant developments. The company has announced the opening of a new state-of-the-art studio facility in Los Angeles as part of Apple Music’s 10th anniversary celebrations. This new creative campus is designed to enhance artist-driven content creation and audio innovation. On the financial side, UBS maintained its Neutral rating on Apple, citing potential risks in a possible acquisition of Perplexity AI, which could become Apple’s largest transaction to date. Meanwhile, JPMorgan has lowered its price target for Apple to $230 from $240, expressing concerns about iPhone demand in the latter part of the year, although it maintains an Overweight rating. Additionally, Apple faces a lawsuit filed by shareholders, alleging that the company downplayed the time required to integrate advanced AI features into its Siri assistant, which they claim affected iPhone sales. These developments highlight Apple’s ongoing strategic initiatives and the challenges it faces in the market.
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