Investing.com — Analysts at KeyBanc lowered their rating on Apple (NASDAQ:) from “sector weight” to “underweight,” citing concerns about sales of the company’s flagship device, the iPhone.
KeyBanc analyst Brandon Nispel said in a note to clients that research conducted by the investment bank shows that demand for the lower-priced iPhone SE is “not purely additive” to overall smartphone sales. It was pointed out that it was done.
Meanwhile, other data suggests that the rate of cell phone upgrades in the U.S. is “unlikely to increase” in the short term, Nispel said. Some strategists predict that Apple could be inundated with customers upgrading older devices to take advantage of the artificial intelligence-powered features of the recently announced new iPhone 16 models.
“According to our survey, 59% of respondents are interested in upgrading to iPhone 16, which appears to be strong,” Nispel wrote. “However, our research also shows that among respondents who are likely or very likely to upgrade to iPhone 16, 61% are interested in iPhone SE. We believe this is an indication that the iPhone SE will not be incremental and may possibly cannibalize iPhone 16 sales. ”
“This is expected to be Apple’s best growth in three years,” Nispel said. [plus] It added that it was unlikely that there would be “major changes over many years and across all regions and products” and that such increases would be “rare”. […] It’s happened throughout history. ”
Finally, Apple’s stock trades at about 23 times forward 12-month earnings and a 5x premium to tech indexes, making the stock “look expensive relative to its history and relative to its industry peers,” Nispel said. said. Mr. Nispel said Apple’s average valuation over the past three years has been about 20 times expected earnings, while Nasdaq’s historical premium is three times.
Apple shares fell in premarket U.S. trading.
In a separate article on Friday, iPhone sales in China fell 0.3% in the third quarter, while rival Huawei’s devices surged 42%, according to statistics from researcher IDC, in the world’s largest smartphone market. This highlighted the intensification of competition.
