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Investing.com - UBS maintained its Neutral rating and $220.00 price target on Apple (NASDAQ:AAPL) stock, citing promotional activity driving better-than-expected iPhone demand. According to InvestingPro data, Apple currently trades at $265.97, near its 52-week high, with analysis suggesting the stock is trading above its Fair Value.
The investment firm noted that heavy promotional activity in China and India, along with U.S. subsidies targeting the Pro lineup, has boosted iPhone demand beyond previous expectations in the months leading up to the iPhone 17 series launch in September. This promotional push comes as Apple maintains strong financial health, with revenue growth of 5.97% over the last twelve months and a market capitalization of $3.95 trillion.
Multiple e-commerce platforms in China offered discounts on the entire iPhone 16 lineup, while aggressive promotions in Europe contributed to double-digit growth in that region, according to UBS.
Despite the improved demand leading to upward revisions in iPhone estimates, UBS observed that iPhone sell-through actually declined modestly in the September quarter, as strength in the iPhone 17 series did not offset decreases in older generation devices.
With Apple shares trading at approximately 32 times consensus FY26 earnings per share, up from about 26 times three months ago, UBS believes the promotion-driven demand is now more than reflected in the stock price, potentially limiting upside, particularly given Apple’s "limited on-device AI capabilities." InvestingPro analysis reveals an even higher current P/E ratio of 40.5x, supporting this valuation concern. Discover more comprehensive valuation metrics and 15+ additional ProTips with an InvestingPro subscription, including exclusive access to the detailed Pro Research Report for Apple.
In other recent news, Apple is set to release its earnings report on October 30, with TD Cowen maintaining a Buy rating and a price target of $275. The firm anticipates Apple’s September quarter revenues to align with or exceed Wall Street’s expectations of a 7.5% year-over-year growth, while December quarter guidance is expected to show high single-digit percentage growth. Meanwhile, DA Davidson has reiterated a Neutral rating for Apple with a $250 price target, expressing concerns about the company’s valuation due to its high forward earnings multiple compared to its peers. UBS also maintains a Neutral rating with a $220 price target, noting stable iPhone 17 wait times across key markets.
In contrast to Apple’s developments, Globalstar has been in the spotlight following reports of a potential $10 billion sale, significantly higher than its current market cap of approximately $5.3 billion. The Information reported that Globalstar’s chairman, James Monroe, has discussed the possibility of this sale, which may indicate a move towards greater independence from its major customer, Apple. Additionally, a Jefferies report highlighted that while iPhone shipments rose significantly in July, Android smartphone inventory risks in China are increasing due to surging memory prices. This situation presents contrasting inventory dynamics between Android manufacturers and Apple, with the latter experiencing a drop in inventory days.
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