Shares of tech giant Apple (AAPL) are in the green at the time of writing despite comments from KeyBanc Capital Markets warning that hopes for a big recovery across Apple’s business might be too high. Indeed, four-star analyst Brandon Nispel downgraded Apple’s stock to a Sell because he believes the market’s expectations for major growth and a turnaround are “too aggressive.” Interestingly, this is the first time KeyBanc has taken a negative stance on Apple since they began covering it three years ago.
Nispel thinks it’s unlikely Apple will see growth across all its product lines and regions after noting that it has only done this a handful of times over the last two decades. The analyst is also doubtful about Apple’s refreshed iPhone SE boosting total sales. A recent KeyBanc survey found that while there’s interest in the iPhone 16, many customers are also considering the iPhone SE, which could take away from iPhone 16 sales.
Nispel thinks that with Apple’s stock trading at a premium, it will struggle to outperform unless the company exceeds expectations by a wide margin – something he doesn’t expect. As a result, he assigned a new $200 price target, which suggests that the stock could fall by around 14%. It’s worth noting that, so far, Nipsel has enjoyed a 69% success rate on AAPL stock, with an average return of 8.3% per rating.
Concerns Grow among Investors
Nipsel is not the only one who is cautious about AAPL, as concerns grow among investors. Indeed, TipRanks contributor Bernard Zambonin is uncertain if now is the best time to buy, despite his long-term optimism. He states that analysts have continued to raise their estimates over the past three months, which adds pressure on the company to meet these heightened expectations.
He also believes that the full potential of the iPhone 16 may not be realized until more AI features become available, delaying any AI-driven super cycle.
Apple is scheduled to report earnings on October 31 and is expected to report earnings per share of $1.59 on revenue of $94.33 billion.
Is Apple a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 23 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 40% rally in its share price over the past year, the average AAPL price target of $248.34 per share implies 7% upside potential.
