Jefferies told investors to dump Apple stock, warning of a potentially weak revenue number from the technology giant. Analyst Edison Lee downgraded shares to underperform from hold. Lee also cut his price target to $200.75 from $211.84, now reflecting the potential for shares to drop 12.7%. Lee said Apple should miss the revenue growth forecast of 5% for the first quarter of the 2025 fiscal year when it reports later this month. He said the company will likely guide second-quarter revenue to a percentage in the low single digits, which would also come in lower than consensus forecasts. Beyond financials, Lee called the outlook for artificial intelligence “subdued” at Apple. That can be a concern for market participants, whose attention has largely been focused on the potential of the technology for more than a year. In addition to chilled AI interest, he said poor iPhone sales can also be a reason for the weak revenue. To be sure, Lee’s downgrade is out of line with Wall Street. Nineteen analysts say to buy Apple and six say it’s a hold, according to Tipranks.com. Just three other analysts recommend selling the shares. The stock has dropped more than 8% in 2024, taking a chunk out of last year’s 30% surge. Apple reports earnings on Jan. 30.
Jefferies downgrades Apple to rare underperform rating, says revenue may disappoint
In a surprising move, investment firm Jefferies has downgraded tech giant Apple to a rare underperform rating. The firm cited concerns over Apple’s revenue potential, suggesting that the company may not meet expectations in the coming quarters.
This downgrade comes as a shock to many investors, as Apple has long been considered a top performer in the tech industry. However, Jefferies analysts believe that the company’s revenue growth may fall short of projections, leading to a disappointing performance for shareholders.
It remains to be seen how this downgrade will impact Apple’s stock price in the short term. However, investors should take note of Jefferies’ cautionary stance on the company’s future prospects and adjust their investment strategies accordingly.
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