Several Wall Street analysts have downgraded Apple (AAPL) stock ahead of the company’s December-quarter earnings report scheduled for January 30, 2025. Investment bank Jefferies downgraded Apple to underperform from hold, while Loop Capital reduced its rating to hold from buy. Additionally, JPMorgan cut its price target for Apple.
Wall Street analysts downgrade Apple ahead of earnings report
According to Investors.com U.S. Rep. Nancy Pelosi recently sold shares of Apple, increasing her investments in other tech firms such as Alphabet (GOOGL) and Amazon (AMZN). Jefferies analyst Edison Lee expressed concerns over “weak” iPhone sales, particularly in China, and forecasted that Apple could miss estimates for its fiscal first quarter. He highlighted that sales expectations for current and upcoming iPhones remain high, largely due to a slower rollout of AI features branded as Apple Intelligence. Lee remarked, “Current expectations for Apple Intelligence to kick-start a super upgrade cycle are too high, in our view,” predicting a gradual rollout.
Loop Capital analyst Ananda Baruah also downgraded Apple stock, noting signs of “materially softening iPhone demand.” In a client note, Baruah stated that the expected generative AI features did not enhance iPhone 16 sales and described the Apple Intelligence rollout as “dismal.” He commented, “The new Siri promised is rife with issues and user experience has been extremely disappointing.” Furthermore, he mentioned that AI features intended to assist in writing have faced poor reception.
JPMorgan analyst Samik Chatterjee retained an overweight rating on Apple but reduced his price target from $265 to $260, voicing caution about the company’s outlook. He cited concerns regarding smartphone market share loss in China, limited traction for AI features, and foreign exchange headwinds. Chatterjee noted that the focus preceding the earnings report is less about the quarter itself and more about Apple’s future direction.
On January 30, Apple will report results for the first quarter of its fiscal year 2025, which encompasses the vital holiday quarter. Analysts predict this report is crucial for Apple’s stock, especially given the company’s push to revive revenue growth after a period of stagnation. Since 2022, Apple has not shown significant revenue growth, though it has managed earnings improvements through share buybacks and enhanced profitability.
As of Tuesday, Apple shares dropped 3.2%, closing at $222.64, reflecting a notable decline of approximately 12% in 2025. Jefferies projected a price target of $200.75 per share down from $211.84, citing weak demand in both the iPhone market and the broader consumer electronics sector. The firm anticipates that Apple may also struggle to meet its March quarter guidance.
JPMorgan noted that the strong dollar and limited appetite for Apple products are contributing factors to its downgrading sentiment. Moreover, they stated that Apple’s premium phones do not benefit from the local government subsidies available to low-to-mid-tier competitors.
Recent data from Canalys revealed that Apple lost its position as the largest smartphone seller in China last year, with its latest iPhones lacking the recently launched AI capabilities.
Featured image credit: Medhat Dawoud/Unsplash
