Jefferies analyst Edison Lee downgraded the rating on Apple (AAPL – Research Report) to a Sell today, setting a price target of $170.62.
Edison Lee’s rating is based on a combination of factors that suggest potential challenges for Apple’s financial performance. One significant concern is the anticipated impact of tariffs, which are expected to result in a $900 million cost in the upcoming quarter. This tariff impact is likely to affect the company’s earnings, particularly as it relates to iPhone shipments from China.
Additionally, Apple’s product gross margin has been under pressure, with a notable decline in the March quarter. Although there was some offset from improved service margins, the overall product margin remains at its lowest in five years. The revenue growth, while present, is driven by specific regions and product lines, such as iPads and services, rather than a broad-based increase. These factors, combined with the potential for further tariff increases, contribute to the expectation of earnings downside, leading to the Sell rating.
In another report released on April 30, Barclays also maintained a Sell rating on the stock with a $173.00 price target.
Based on the recent corporate insider activity of 40 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AAPL in relation to earlier this year.