Independent research firm MoffettNathanson has reaffirmed its "sell" rating on Apple (AAPL, Financial) and significantly reduced its target price to $141, much lower than the Wall Street average of $241. Apple recently closed at $193, suggesting a potential 26.94% downside according to Moffett. Craig Moffett, co-founder of the firm, highlighted that the market has not fully accounted for the risks Apple faces, including global economic slowdowns, which might weaken consumer purchasing power and subsequently affect device sales.
Moffett noted the impact of "anti-U.S." sentiments in China and other countries, as well as trade tensions fueled by tariffs, as factors likely to hinder Apple's profit growth. Although there is a short-term increase in earnings per share to $7.20 due to pre-tariff buying, Moffett views this as unsustainable. For fiscal year 2026, the earnings expectation has been revised down from $7.87 to $7.06.
Despite a reduction in the long-term price-to-earnings ratio, Moffett argues that Apple's valuation remains risky due to limited earnings expectation adjustments. The firm also points out Apple's delay in AI commercialization and potential legal risks tied to Alphabet's (GOOGL) antitrust issues, as search engine revenue contributes significantly to Apple's operating profit.
Over the past month, Apple's stock has declined by approximately 12%, intensifying investor uncertainty about its future amid AI investment trends.
