Apple Stock Downgraded: Valuation Concerns and China Woes Spark Rare ‘Sell’ Rating
Staff Editor Apple Stock Downgraded to ‘Sell’ Amid Valuation Concerns
In a rare move, Apple Inc. (AAPL) stock received a downgrade to ‘Sell’ from analysts at MoffettNathanson, citing concerns over premium valuation and negative headlines. The downgrade stands out as only four out of over 60 analysts currently maintain a “sell” rating on the tech giant’s stock. Following the news, Apple shares traded down approximately 1%.
Craig Moffett, the analyst behind the downgrade, described Apple as a “truly great company” but expressed concern over what he views as an unwarranted rise in stock price. Moffett highlighted a series of negative news flows affecting the company, including legal issues with Alphabet, weak sales in China, and the underwhelming performance of the Vision Pro headset. Of particular concern are the lukewarm sales projections for the upcoming iPhone 16.
The analyst also pointed to broader issues facing Apple, including a lack of a clear upgrade cycle and consumer indifference to AI functionality in its products. Moffett suggested that the current stock setup does not offer a favorable risk/reward profile for investors.
From a valuation perspective, Apple’s stock is trading near historical extremes, making it one of the most expensive among the so-called Magnificent Seven stocks. This high valuation comes despite Apple showing the slowest growth rate among its peers. Moffett attributes the recent “melt-up” in stock price to overall market conditions, which he believes have overshadowed growing risks.
The downgrade report concludes that the outlook for Apple’s shares is unattractive given the challenging backdrop. Moffett noted that risks identified in August have only intensified, further supporting his bearish stance on the stock.
As investors digest this rare downgrade, all eyes will be on Apple’s upcoming product launches and financial results to gauge the accuracy of these concerns.
