Investment firm Oppenheimer has downgraded tech giant Apple (AAPL) stock from Buy to Hold due to reduced estimates for iPhone sales over the next 12-18 months. As a result, Oppenheimer has removed its $250 price target on the stock. This decision comes just one day before Apple is set to release its first quarter Fiscal 2025 financial results and outlook. For reference, analysts are expecting adjusted earnings per share of $2.35 on revenue of $124.3 billion.
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Oppenheimer analysts point to two main challenges facing iPhone growth: increased competition in China and a lack of innovative Apple Intelligence and generative AI apps to drive device replacement. According to data from Canalys, iPhone shipments to China fell 25% in the fourth quarter and 17% throughout 2024. Analysts Andrew Northcutt and Martin Yang (who has a 4.5-star rating) believe that these factors will lead to a slower-than-expected iPhone replacement cycle.
Therefore, Oppenheimer has reduced its full-year Fiscal 2025 revenue and earnings per share forecasts for Apple. The firm now expects revenue of $407 billion and earnings per share of $7.22, which are down from previous forecasts of $431 billion and $7.73.
Is Apple a Buy or Sell Right Now?
Overall, analysts have a Moderate Buy consensus rating on AAPL stock based on 18 Buys, eight Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 27% rally in its share price over the past year, the average AAPL price target of $243 per share implies 2.6% upside potential.
