Investors should consider taking profit in Apple Inc (NASDAQ: AAPL) as its share price runs the risk of seeing a meaningful decline over the next twelve months, warns Brandon Nispel – a KeyBanc analyst.
On Friday, Nispel downgraded the iPhone maker to “underweight” and said its shares could sink to $200 that indicates a potential 13% downside from here.
He’s dovish on the tech behemoth as its launch of iPhone SE in early 2025 “could possibly be cannibalistic to iPhone 16 sales.”
Apple stock has rallied some 40% over the past six months.
iPhone SE could be a headwind for Apple stock
KeyBanc moved to downgrade Apple today on the back of a recent survey in which 59% of the participants said they wanted to upgrade to the iPhone 16.
But 61% of the respondents who indicated interest in upgrading demonstrated interest in the upcoming iPhone SE as well.
“From our view, if iPhone SE is successful, iPhone units could rise but average selling prices could call, contrary to consensus,” he argued in his research note.
The last time AAPL rolled out an iPhone SE was in 2022.
Brandon Nispel turned bearish on Apple stock this morning also because the expectations that the company’s revenue will increase across all geographies and all categories in 2025 are “unrealistic”.
And it’s not like the Cupertino headquartered firm has a super lucrative dividend yield to make income investors flock into its shares at current levels either.
AI will take time to help Apple share price
KeyBanc’s dovish call on Apple Inc comes only days before the Nasdaq-listed firm is scheduled to report its financial results for the fourth quarter. Consensus is for it to earn $1.54 versus $1.46 per share a year ago.
In June, the multinational announced Apple Intelligence – its own brand of AI solutions, hoping that it would result in a major upgrade cycle.
But analysts have been concerned lately that Apple Intelligence may not be able to drive material demand anytime soon.
Brandon Nispel also talked of a need for AAPL to “articulate a plan to monetise Apple Intelligence” on its upcoming earnings release for the share price to push further up.
“From the looks of it, Apple appears to be working on awareness, where monetisation will take time,” he told clients on Friday.
Earlier this week, UBS analysts also warned that iPhone unit sales will likely remain flat on a year-over-year basis in the company’s September quarter, further reflecting that the AI hype is far from reflecting on revenue for now.
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