Apple Inc. stock AAPL was downgraded to sell from neutral by Lightshed analysts on Friday, based on a more conservative outlook for iPhone sales and moderating growth expectations for services revenue. Lightshed set a price target of $120, or about 20% below its current price. “We believe the lengthening of the smartphone replacement cycle will persist into calendar 2024 for the following reasons,” the analysts wrote. Phone subsidies by wireless operators are flat to lower in 2023 and are lower in fiscal 2024; there are longer terms on phone payment plans; the increased use of eSim to activate a new customer on an existing phone; no new meaningful apps to drive interest in 5G; and potential economic weakness will rein in consumer spending. “In addition, we believe there is increased risk to iPhone sales in China due to retaliation stemming from a worsening relationship between the US and Chinese governments. As a result, our iPhone revenue estimate is $6 billion below consensus in Fiscal 2023 and $17 billion lower than consensus in Fiscal 2024,” the analysts wrote. Apple stock was slightly higher premarket but has fallen 5% in the last 12 months, while the S&P 500 SPX has fallen 8%.
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