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On Friday, Rosenblatt Securities analyst Barton Crockett adjusted the firm’s stance on Apple Inc. (NASDAQ:AAPL), downgrading the stock from Buy to Neutral and setting a price target of $217. This represents a decrease from the previous target of $223. The revision follows Apple’s second fiscal quarter results of 2025, which Crockett acknowledged demonstrated the company’s exceptional supply chain capabilities and a stronger demand for iPhones than many had anticipated. The tech giant, currently valued at $3.2 trillion, has shown modest revenue growth of 2.61% over the last twelve months. According to InvestingPro, 7 analysts have recently revised their earnings expectations upward for the upcoming period.
Crockett’s assessment noted that while Apple showcases impressive operational expertise, the stock’s performance would hinge on a significant boost in iPhone sales driven by artificial intelligence advancements. He expressed concerns that the prospects for such a sales surge are diminishing. "We downgrade Apple to a NEUTRAL rating, and take our price target down $6 to $217," Crockett stated. He described Apple as a "well-run company, with OK-muted growth," emphasizing the necessity for an innovative new product to reignite growth. InvestingPro data supports the company’s operational strength, showing a "GOOD" overall Financial Health Score, with particularly strong marks in profitability metrics.
The analyst also pointed out that Apple’s stock is currently trading at a premium multiple, which may not be justified given the current state of growth and the challenging external factors such as fluctuating tariffs and regulatory pressures. These conditions contribute to a more cautious outlook on the company’s near-term valuation. Indeed, InvestingPro analysis indicates the stock is trading above its Fair Value, with a P/E ratio of 33.68 and elevated EBITDA and revenue multiples. For detailed valuation insights and more ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.
Despite the downgrade, the acknowledgment of Apple’s supply chain efficiency and the better-than-expected iPhone demand suggests some positive aspects in the company’s recent performance. However, the lack of a new, groundbreaking product on the horizon appears to be a key factor in Rosenblatt’s tempered expectations for Apple’s stock.
Investors and market watchers will likely monitor Apple’s future product announcements and technological advancements closely, as these could play a crucial role in the company’s growth trajectory and stock valuation moving forward.
In other recent news, Apple Inc. reported strong financial results for the first quarter of 2025, exceeding expectations with an earnings per share (EPS) of $1.65 and a revenue of $95.36 billion. This performance was driven by a 5% year-over-year increase in total revenue and record revenue in its services segment, reaching $26.6 billion. Despite these positive results, Apple’s stock experienced a decline, attributed to investor concerns over future growth prospects and challenges in key markets like China. The company also announced a $100 billion share buyback program, signaling confidence in its financial health.
In addition, DA Davidson raised Apple’s stock price target to $250, citing strong iPhone sales and a robust earnings report, while maintaining a Buy rating. Conversely, Citi adjusted its price target to $240 but also reaffirmed a Buy rating, noting a modest earnings beat and stable sales figures. Morgan Stanley (NYSE:MS) maintained its Overweight rating with a $235 price target, highlighting Apple’s double-digit growth in iPhone upgraders and steady revenue from China.
Apple’s management acknowledged the impact of tariffs, estimating a $900 million cost for the June quarter, and emphasized efforts to diversify production to Southeast Asia. The company remains optimistic about its prospects, with plans for significant investments in the U.S. and continued focus on innovation and product diversification.
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