Apple stock receives a super rare downgrade

Apple Inc (NASDAQ: AAPL) opened in the red this morning after a KeyBanc analyst downgraded the iPhone maker from overweight to “sector weight”.

Brandon Nispel told clients in a research note today that the tech behemoth is trading a whopping 7.1 times premium to Nasdaq on enterprise value to EBITDA basis.

Such a rich multiple, he argued, is hard to justify unless its “growth profile inflects higher”.

The KeyBanc analyst turned dovish on Apple stock also because he expects weaker growth in margins moving forward. Nispel is convinced that iPhone revenue will actually end up down 2.2% in 2023.

His forecast for revenue growth in fiscal 2024 also now sits at 3.5% – well below the 6.0% consensus. At writing, shares of the multinational are down 13% versus their year-to-date high.

Bill Ackman predicts that a slowing economy may halt the Fed’s rate hikes, potentially propelling Apple stock once rates reverse course. Here’s what $AAPL investors should know. @TheStreet https://t.co/AjcSYhAOUi

— The Apple Maven (@AppleMaven) October 3, 2023Apple to see weaker growth in the U.S.

On Wednesday, Brandon Nispel also warned that growth will likely lose steam in the United States that generates about 37% of the total revenue for Apple Inc.

Citing data from wireless carriers, the KeyBanc analyst argued that upgrades were near all-time lows and iPhone promotions as well were being focused on more expensive plans. His research note reads:

We expect the United States to experience its fourth consecutive year-on-year decline in F4Q23, potentially carrying into F1Q24 for several reasons.

Nispel turned dovish on the Apple stock today even though CEO Tim Cook unveiled the new iPhone 15 only a month ago as Invezz reported here.

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