Wall Street's pessimism toward Apple is rapidly intensifying.
Jefferies recently downgraded Apple stock to an "underperform" rating, bringing the number of institutions holding equivalent sell ratings to six, matching the highest level since 2012 and reflecting deep concerns about the iPhone's growth prospects.
Jefferies analyst Edison Lee noted in a research report that supply chain surveys indicate Apple has canceled the 20th-anniversary all-glass iPhone model due to poor production yields. He believes this signals that Apple's difficulty in boosting the average selling price (ASP) through new form factors is far greater than anticipated. Jefferies simultaneously lowered its Apple price target from $285.56 to $263.66, while the stock closed at $313.33 last Friday.
Apple shares fell 1.2% in pre-market trading on Monday, bringing their total decline from recent highs to approximately 8%. This sell-off was directly triggered by weak sales guidance in Apple's latest quarterly report, where the company cited component shortages and issued a disappointing outlook.
iPhone ASP Boost Path Blocked, Foldable Devices May Remain a Niche Product
The core logic behind Jefferies' downgrade points to Apple's long-standing growth model, which relies on product form factor upgrades to drive ASP and gross margins, hitting a bottleneck.
Edison Lee wrote in the report that the cancellation of the 20th-anniversary all-glass iPhone due to production yield issues shows that using new iPhone designs to increase ASP is "more difficult than expected." Against this backdrop, the upcoming foldable iPhone, expected to launch next month, "will become the only key driver for boosting ASP and profitability in the coming years."
However, Edison Lee remains cautious about this "only driver." He noted that significant cost increases for core components like memory chips will force the foldable iPhone to be priced extremely high. "We still believe such an expensive phone will be a niche product," unlikely to bear the weight of driving overall performance.
Seller Camp Expands, Analyst Consensus Rating Hits Lowest Since 2019
Jefferies' downgrade is the latest example of the recent wave of short-selling sentiment against Apple on Wall Street. According to Bloomberg-compiled data, six institutions now hold ratings equivalent to "sell" on Apple, matching the all-time high set in 2012. Last month, KeyBanc Capital Markets had already downgraded Apple to "underweight," citing concerns about both demand outlook and valuation.
From a broader analyst perspective, Apple's composite recommendation score (a weighted measure of buy, hold, and sell ratings) currently stands at just 3.88 out of 5, the lowest level since 2019. The proportion of analysts recommending "buy" has fallen below 60%, a stark contrast to other tech giants in the same category—Microsoft, Amazon, and Nvidia all have buy recommendation rates exceeding 90%.
On the stock price front, Apple closed at $313.33 last Friday, down about 8% from its recent high, and slipped another 1.3% in pre-market trading on Monday. As the seller camp expands and the ASP growth logic is questioned, Apple's relative attractiveness among institutional investors is facing a systemic test.
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