Apple's stock has recently reached an all-time high of $323.45, reflecting a nearly 17% increase year-to-date, largely driven by investor interest in the artificial intelligence sector. However, KeyBanc analyst John Vinh warns that rising iPhone prices may lead to reduced consumer upgrades, as U.S. mobile carriers are expected to cut back on device subsidies.
This shift could result in longer holding periods for devices and a slowdown in Apple's user base growth, ultimately impacting its Services revenue, which KeyBanc projects will grow at only 7% by the end of 2027, significantly lower than the consensus estimate of 12%.
With Apple trading at a forward earnings multiple of 35, well above the S&P 500's 20.7, KeyBanc believes the stock is overvalued and has set a price target of $250, indicating a potential 21% downside from its recent close. This downgrade contrasts with the broader analyst sentiment, as only two out of 48 analysts covering Apple have an underperform rating