Wall Street increasingly bearish on Apple ahead of earnings

Apple (AAPL) is scheduled to report results of the first fiscal quarter of FY25 after the market close on Thursday, January 30, with a conference call scheduled for 5:00 pm ET. What to watch for: 

EXPECTATIONS: Last quarter, Apple beat consensus sales and earnings expectations, reporting EPS of $1.64 on Q4 revenue of $94.9B, which compared to consensus forecasts of $1.60 and $94.58B, respectively.

At that time, Apple CEO Tim Cook noted that Apple was reporting “a new September quarter revenue record,” up 6% from a year ago. Cooke added: “During the quarter, we were excited to announce our best products yet, with the all-new iPhone 16 lineup, Apple Watch Series 10, AirPods 4, and remarkable features for hearing health and sleep apnea detection. And this week, we released our first set of features for Apple Intelligence, which sets a new standard for privacy in AI and supercharges our lineup heading into the holiday season.”

Current consensus EPS and revenue forecasts for Apple’s December-end quarter stand at $2.34 and $124.03B, respectively, according to data from LSEG Data and Analytics.

Consensus EPS and revenue forecasts for Apple’s March-end quarter stand at $1.65 and $95.37B, respectively, according to LSEG Data.

Among analysts tracked by Bloomberg that have updated their views on Apple within the last twelve months, 36 have Buy or equivalent ratings, 17 have Hold or equivalent ratings and six have Sell or equivalent ratings. The average twelve month price target of 44 of those analysts is $245.47.

DRUMBEAT OF DOWNGRADES: On January 7, MoffettNathanson downgraded Apple to Sell from Neutral with an $188 price target, arguing that despite the “steady melt-up” in Apple shares over the past few months, there has “actually been a steady drumbeat of bad news.” The news that the analyst highlights includes a federal Judge having declared the payments Google (GOOGL) makes to Apple each year for default search position to be illegal; Apple’s position in China having “steadily weakened”; and the Vision Pro having “disappointed even the low expectations that had been set for it.” The incoming Trump Administration is likely to exempt Apple from import tariffs, but there is “a genuine risk” that Apple will be targeted with retaliatory tariffs in countries negatively impacted by U.S. import duties, the analyst added. However, more important than any of this bad news, is the lukewarm response consumers have given Apple’s first suite of AI features, concludes the analyst, who calls the outlook for Apple’s shares given this challenging backdrop “decidedly unattractive.”

A few days later, Jefferies downgraded Apple to Underperform from Hold with a price target of $200.75, down from $211.84. The firm reduced forecasts to reflect “weak” iPhone sales and the general consumer electronics market. It cut its outlook for iPhone 17 and 18 due to slower artificial intelligence uptake and commercialization. Jefferies expects Apple to miss its revenue growth guidance of 5% fiscal Q1 and guide “to only” low-single-digit revenue growth in Q2, below consensus. The company’s AI outlook is “subdued” and industry checks suggest Apple’s advanced packaging roadmap for the iPhone may face a delay, which is another negative sign, the analyst told investors.

Additionally, Loop Capital downgraded Apple to Hold from Buy with a $230 price target after the firm’s supply chain checks suggested a “material” iPhone demand reduction that the firm sees beginning in the March-end quarter and then “materially amplifying” in the June and September quarters. The firm’s previous “structural Buy call could still materialize,” but it “certainly won’t be for the next nine months,” the analyst told investors.

Earlier this week, Oppenheimer downgraded Apple to Perform from Outperform with no price target as the firm lowered its FY26 EPS estimate by 4% to $7.95, which is below consensus at $8.23, based on reduced iPhone sales estimates in the next 12-18 months. The firm sees “a twofold challenge” of stronger competition in greater China and a lack of compelling Apple Intelligence and generative AI apps to accelerate near-term device replacement, the analyst tells investors. With slower-than-expected iPhone sales and an elevated valuation, the firm believes it will be “challenging” for Apple shares to outperform, the analyst added.

MORE BULLISH VIEWS: Earlier this month, Evercore ISI added Apple to the firm’s “Tactical Outperform” list while keeping an Outperform rating on the shares with a $250 price target. Apple is positioned to deliver an in-line quarter with continued emerging market growth and strength from Services and Wearables, the analyst tells investors in a research note. For the March quarter, the firm continues to expect a “stronger for longer” iPhone cycle that could drive growth ahead of seasonality, but notes that China “remains a key wildcard.” There has been some concern around industry data indicating iPhone weakness, which “could help lower expectations and enable to the stock to work on a weaker than expected guide,” contends Evercore. It believes the shifting of investor focus to the iPhone 17 and SE plus another “better than feared” China quarter should also add some “incremental positivity to the narrative around iPhone.”

Meanwhile, BofA lowered the firm’s price target on Apple to $253 from $256 and keeps a Buy rating on the shares ahead of the company reporting fiscal Q1 results after market close on Thursday, January 30. The firm expects a “strong report,” driven by initial demand for the iPhone 16, noting that its revenue estimate of $126B compares to the Street at $124B and it models iPhone units of 79M, above the Street forecast of 77M. However, the firm lowered its fiscal Q2 iPhone units estimate to 49M from 56M, partly due to the weak macro and partly due to the staggered launch of Apple Intelligence features, the analyst tells investors in a preview. BofA believes weaker iPhone sales are well understood by investors, so it reiterates a Buy rating on margin resiliency, tailwinds to gross margin, and strong cash flow.

OTHER HEADLINES: During the quarter, other reporting on Apple’s products and plans have included:

• Apple weighs push into smart glasses with internal user study, Bloomberg says
• Apple postponing some iOS 19 features to spring 2026, Bloomberg reports
• Apple’s next smartwatch to send texts via satellite, Bloomberg says
• Apple planning thinner, foldable iPhones, WSJ reports
• Apple ceases effort to make iPhone hardware subscription service, Bloomberg says
• Apple exploring smart doorbell system, Bloomberg reports
• Apple working with T-Mobile (TMUS), SpaceX to link with Starlink, Bloomberg reports
• Federal judge denies Apple effort to intervene in Google search remedy trial

SENTIMENT: Check out recent Media Buzz Sentiment on Apple as measured by TipRanks.