Apple has received two downgrades. Analysts' confidence is at a 5-year low

Immediately two analysts downgraded Apple in one day. This led to a drop in the company's consensus valuation to its lowest level since 2020. The deterioration of sentiment on Wall Street is attributed to the lack of innovation in key devices, doubts about the rapid return on AI initiatives and increased competition, especially in the Chinese market. Only 55% of analysts now advise investors to buy Apple shares, while other bigtechs have a share of more than 90%.

Shares of Apple on Thursday received two downgrades at once: from DA Davidson and from Phillip Securities. DA Davidson lowered the recommendation from "buy" to "hold", writes CNBC. At the same time, the target price remained at $250, assuming a 10 percent growth in the company's shares.

Phillip Securities downgraded Apple from Neutral to Reduce ("sell") with a $200 target price, citing duties, high capital expenditures and weak progress in artificial intelligence, Investing writes. That estimate implies a 13.5% drop in Apple shares.

DA Davidson analyst Gil Luria said he is disappointed with Apple's product strategy over the past year, CNBC writes. In his opinion, until the company can rethink current devices or offer truly new solutions, its growth rate will remain low.

"We are not questioning the utility of the products, but Apple has demonstrated weak innovation in its core product line, starting with the iPhone," he wrote.

He said the release of Apple's foldable phone model next year is "unlikely to be a good enough reason for the average user to upgrade their device."

"So we remain disappointed until the company can really bring innovation to its core product line or create a new product category to accelerate growth," Luria added.

The lack of innovation has also caused the company to lose some ground amid increasing competition overseas, Luria said, pointing to "several equally good, if not better alternatives." This is especially true in China, the analyst added.

He also cited Apple's absence from the artificial intelligence ecosystem as another disappointing factor.

Luria and his team criticized Apple's key smartphone lineup, noting, "The iPhone 16 family, as well as the recent announcement of the iPhone 17 and iPhone Air, raise doubts about whether they are attractive enough to launch a full cycle of upgrades," Investing quoted Luria as saying.

Phillip Securities analyst Helena Wang noted that Apple quotes, despite weak performance since the beginning of the year, have added more than 30% from the April low amid easing concerns about duties, writes Bloomberg. According to Wang, Phillip Securities maintains a "cautious view" on the company, particularly because Apple has "no meaningful AI innovations to offset continued product weakness and the Chinese market situation." Its assessment is published by Bloomberg.

Quotes Apple, part of the group "Magnificent Seven", added almost 1% in trading in New York. Earlier, the company's securities declined for four consecutive days, losing more than 5%, and since the beginning of the year they have fallen in price by 8.7%.

JP Morgan, on the contrary, on September 11, maintained a "buy" recommendation on Apple shares, setting the target price at $255, follows from the review of analyst Samik Chatterjee, writes MarketScreener. His estimate implies a 12.3% rise in the stock.

Nevertheless, after DA Davidson and Phillip Securities downgraded Apple's consensus rating - a measure of the ratio of "buy," "hold" and "sell" recommendations - fell to 3.9 out of 5, the lowest since early 2020, according to data compiled by Bloomberg. Only 55% of analysts now advise buying the company's securities, an extremely low level for megacaps. By comparison, Nvidia, Microsoft and Amazon have this indicator exceeds 90%, the agency writes.

This article was AI-translated and verified by a human editor