Worries over cooling demand for iPhones have left Apple with the fewest bullish analyst ratings in more than two years.
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Apple’s Shares Reach Record High Despite Concerns
Even as Apple’s shares have powered their way to a fresh record high, worries over cooling demand for iPhones and sputtering growth at its services business have left the biggest US company with the fewest bullish analyst ratings in more than two years.
UBS Group Cuts Apple to Neutral
UBS Group is the latest broker to take a step back, cutting the technology behemoth this week to neutral from buy. That leaves Apple with buy ratings from 67% of the analysts who follow the company, the lowest since late 2020 and the worst among mega-cap peers.
Risky Move for Analysts
Turning less bullish on the stock is a big risk for analysts since Apple has been a standout performer for years — its market value is inching toward US$ 3 trillion — and institutional investors widely hold it. Yet sceptics see a lack of fresh catalysts for the rally that has lifted the shares 41% this year to $183.79.
Concerns Over iPhone and Mac Demand
iPhone and Mac demand could come under pressure in the second half of the year, while growth at its services unit —- which includes the app store, Apple Music, Apple TV and other subscription products — is slowing, UBS’s David Vogt said in a report dated Monday.
Price Target Nudged Higher
While he nudged his price target on the stock higher to $190 from $180, this implies only a 3% gain from Monday’s close. The stock, at 29 times estimated earnings, trades at a 50% premium to the broader market, the most in a decade, Vogt said.
Soft Fundamentals Over the Next Six to Twelve Months
“We do not believe Apple shares offer a compelling risk/reward, particularly in light of soft iPhone, PC and App Store fundamentals over the next six to 12 months,” Vogt wrote.