Apple (AAPL) may have dodged the tariff bullet, or maybe not. Wall Street firm MoffettNathanson has sounded the alarm, warning of a potential 30% drop in AAPL stock amid ongoing tariff headwinds. To support this view, analyst and firm co-founder Craig Moffett slashed his price target from $184 to $141 while maintaining his Sell rating.
‘Apple is Nowhere Near Out of the Woods,’ Says Analyst
In its latest report, MoffettNathanson flagged multiple headwinds weighing on Apple, including shifting geopolitics, higher production costs from tariffs, and growing recession risks. The firm acknowledged that the worst-case scenario was temporarily avoided thanks to a tariff exemption for smartphones by the Trump administration. However, it warned that significant challenges remain, emphasizing, “Apple is nowhere near out of the woods.”
Moffett further noted that a 20% tariff on China-imported Apple products still stands, putting the company in a tough spot. He said Apple can either pay huge tariffs or spend a lot to change its supply chain; both choices cost more. He also highlighted that shifting production to the U.S. isn’t practical, since China’s workforce is massive and much cheaper. Although Apple has shifted some production to India, Moffett believes it’s not a full solution. While India can meet half of the U.S. iPhone demand, the parts still come from China, raising concerns about potential tariffs from both countries.
It’s Not Just Tariffs
Apart from tariffs, the firm highlights other reasons for a bearish outlook on AAPL stock. With Google’s (GOOGL) monopoly case trial starting this month, Apple’s royalties are at risk. Notably, Apple earns more than a quarter of its operating income from royalties paid by Google, and the judge in the case has already ruled these payments illegal.
At last, the report also noted that there’s not much ahead to get investors excited. While a foldable iPhone could create buzz, it’s likely something that would be unveiled next year. However, given the current tariff threats, Moffett stated, that now appears “unimaginable.”
Is Apple a Good Stock to Buy Right Now?
On TipRanks, AAPL stock has a consensus Moderate Buy rating among 33 Wall Street analysts. That rating is based on 18 Buys, 12 Holds, and three Sells assigned in the last three months. The average AAPL price target of $240.66 implies a 20.5% upside from current levels.
