Apple Downgraded by Two Institutions Amid Tariff Concerns, Slowing Growth
1min read Apple Inc. faced a downgrade from at least two institutions following the release of its quarterly earnings report, which heightened investor concerns over tariffs and the company's growth prospects. Jefferies lowered its rating on the stock to "underperform," becoming one of the few institutions to take a bearish stance on the iPhone manufacturer. Analyst Edison Lee noted that while the earnings met expectations, "the impact of tariffs will expand over time, further pressuring the company's profit outlook."
Apple's financial report indicated that some of its sales fell short of expectations and forecasted that tariffs would increase costs by $900 million for the current quarter. The company also projected that revenue growth for the current quarter would be in the "low to mid-single digits" range compared to the previous year.
Rosenblatt Securities analyst Barton Crockett downgraded the stock from "buy" to "neutral." He wrote, "We are looking at a well-run company with growth that is decent but slowing, in need of an exciting new product to reignite growth. Its valuation is high, and the tariff and regulatory environment is volatile."
Crockett added that the earnings report highlighted Apple's "excellent supply chain skills and better-than-expected market demand for the iPhone." However, for the stock to perform better than its current levels, "there needs to be a strong acceleration in iPhone sales driven by artificial intelligence," and "this expectation is gradually weakening over time."
The downgrades underscore a more cautious stance on apple compared to other mega-cap stocks. Among analysts tracked by Bloomberg, less than 60% recommend buying the stock, a lower proportion than for other mega-cap stocks. Following Jefferies' downgrade, Apple has received "sell" or equivalent ratings from four institutions.
Ask Aime: Why is Apple's stock price dropping after earnings?
