Apple (AAPL.US) downgraded to "Hold" by Loop Capital: iPhone shipment cuts likely difficult to offset, valuation at five-year high

According to Golden Ten Data, Loop Capital downgraded Apple (AAPL.US) from "Buy" to "Hold", citing a reduction in iPhone shipments. "The key point is: Apple previously cut iPhone shipments for the September and December quarters by 10%. At the time, we believed that since these cuts were due to supply-side reasons (memory and processors) rather than demand-side, the company would be able to recover many (if not most) of the reduced units naturally before calendar year 2027," wrote Loop Capital analyst Ananda Baruah in a report to clients. "But now it appears this is no longer the case. In addition, although this is not the main point of our view today, we acknowledge that with memory costs continuing to rise, there is downside risk to gross margins."

He continued: "We remain optimistic about Apple's long-term market share growth and the services business story... but we believe that after the recent stock price increase, the stock also needs a fundamental catalyst reset... especially considering that the valuation is at a five-year high while iPhone shipments have been cut and gross margins may face additional pressure."