KeyBanc Capital Markets believes Apple will struggle to achieve sales growth, especially in the United States, and downgraded its rating on the company. Before the iPhone 15 was released, investment companies had lower expectations for it, and JPMorgan Chase lowered the target price of Apple stock from $235 to $230. Subsequently, JPMorgan Chase maintained this price target despite reporting that iPhone 15 Pro Max shipping times are "historically" long.
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Now, KeyBanc Capital Markets has also raised questions about Apple's ability to continue beating expectations. In a note to investors seen by CNBC, the company expected weak growth in the Americas and sales "likely to struggle."
Analyst Brandon Nispel wrote: "We expect U.S. sales to post a fourth consecutive year-over-year decline in 4Q23 and likely extend into FY124. We also expect margin improvement to slow in the coming years."
"We believe [Apple] stock trades at a high multiple and expect trends to remain weak in major markets such as the U.S., putting pressure on growth [in international markets]," Nispel continued. "We believe that to justify upside in AAPL's stock price, a peak valuation would be needed, or its growth profile would need to see a higher inflection point."
KeyBanc also predicts that mobile phone upgrade rates will hit a record low as U.S. carriers target the more expensive iPhone 15 Pro models. Overall, iPhone revenue will fall 2.2% in 2023, but will grow 2.1% in 2024, the company said.
KeyBanc also predicts Apple’s revenue growth in fiscal 2024 will be 3.5%. According to CNBC, the average estimate of other analysts was 6%. As a result, KeyBanc downgraded Apple to "sector weight" from "overweight."