Apple received a rare rebuke from Wall Street on Friday, as an analyst at Jefferies downgraded the stock, warning that the hype surrounding future iPhone sales has become excessive.
Analyst Edison Lee cut his rating on the stock to “underperform,” which is basically a recommendation to sell. He argues that the stock’s current high price is based on an “overly bullish iPhone outlook” that is simply unrealistic. Apple’s shares fell nearly 1% on the news.
It’s unusual for analysts to be so bearish on Apple. Of all the big tech companies known as the “Magnificent Seven,” only Tesla has a worse rating. By contrast, giants like Microsoft and Nvidia have “buy” ratings from over 90% of analysts.
Apple’s stock has been on a tear recently, jumping more than 20% since early August, and is now back near its record highs. Much of this excitement is based on strong demand for the latest iPhone 17 and considerable buzz about a rumored foldable iPhone.
But Lee believes all this good news is already “in the price.” He thinks investors are now expecting way too much from the upcoming foldable phone and the upgrade cycle it might create. He also questioned how big the market really is for a phone that could cost around $2,000. As a result, he trimmed his price target for the stock, suggesting it could fall by more than 20% from its current level.
