Gold bars to be exempt from tariffs, White House clarifies
On Friday, KeyBanc Capital Markets maintained their Sector Weight rating on Apple Inc (NASDAQ:AAPL). stock. Despite the positive news that smartphones, including Apple’s products, will be exempt from tariffs, KeyBanc analysts led by Brandon Nispel expressed continued caution regarding the company’s outlook. The firm’s stance is influenced by several factors, including high growth expectations for 2026, stagnant upgrade rates, increased competition in China, and potential legal challenges related to the Google (NASDAQ:GOOGL) Department of Justice lawsuit and changes to the App Store. This cautious stance aligns with recent data from InvestingPro, showing 20 analysts revising their earnings expectations downward for the upcoming period.
Nispel highlighted that while the tariff exemption is beneficial for Apple, the current valuation of Apple’s stock remains a concern. With a market capitalization of $3.16 trillion, Apple’s shares are trading at approximately 21 times KeyBanc’s estimated 2026 adjusted EBITDA, which is in line with the three-year average. Current metrics from InvestingPro show the stock trading at an EV/EBITDA multiple of 22.46x and a P/E ratio of 32.83x, suggesting premium valuations. According to InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels. The anticipated growth of 4.91% may not justify these multiples due to the uncertain consumer spending environment and other mentioned risks.
The analyst’s broader thesis suggests that the upcoming iPhone 16 and Apple Intelligence features are unlikely to trigger a significant upgrade cycle. This prediction is based on the observation that upgrade rates have not shown a substantial increase and may continue to be subdued.
Furthermore, the competitive landscape in China is described as elevated, which could pose additional challenges for Apple in one of its key markets. Additionally, legal risks associated with the ongoing Google DOJ lawsuit and potential changes to the App Store’s operations could impact Apple’s Services revenue, adding to the uncertainty around the company’s future performance.
In conclusion, while the tariff exemption is a favorable development for Apple, KeyBanc’s assessment indicates that the stock’s current price may not fully reflect the potential headwinds that the company faces. The firm’s reiteration of a Sector Weight rating on Apple stock underscores a neutral outlook, suggesting that investors should weigh the potential risks against the possible benefits.
In other recent news, Apple Inc. announced a range of new accessibility features aimed at enhancing user experience across its devices. These updates include Accessibility Nutrition Labels on the App Store and a new Magnifier app for Mac, designed to assist users with disabilities. Additionally, Apple is reportedly developing an AI-driven battery management feature for its upcoming iOS 19, as reported by Bloomberg. This feature aims to optimize energy usage by analyzing user behavior to improve battery life.
In a separate development, Apple has blocked access to Epic Games’ "Fortnite" on iPhones globally, affecting users in the United States and Europe. This decision will remain in place until Apple decides to lift the block. Furthermore, President Donald Trump has expressed concerns over Apple’s production shift to India, following a discussion with CEO Tim Cook. Despite this, Apple plans to increase production in the United States.
Lastly, the Magnificent Seven stocks, including Apple, experienced a rally as the US and China agreed to temporarily reduce tariffs on each other’s goods. This agreement is part of a 90-day cool-off period between the two nations.
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