(Bloomberg) — Even though Apple Inc. Shares of Apple Inc. clawed their way to a new record high as concerns over cooling demand for iPhones and rapid growth in its services business left the largest US company with the lowest bullish analyst rating. Since two years
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UBS Group AG is the latest broker to take a step back, this week downgrading the technology giant from buy to neutral. That leaves Apple with a buy rating from 67% of analysts who follow the company, its lowest since 2020 and the worst among megacap peers, according to data compiled by Bloomberg.
Turning short bullish on the stock is a big risk for analysts, as Apple has been an outstanding performer for years — its market value is inching toward $3 trillion — and it’s widely held by institutional investors. Yet skeptics see a lack of new catalysts for the rally that has lifted shares 41% this year to $183.77. Shares were little changed after Tuesday’s decline.
iPhone and Mac demand could come under pressure in the second half of the year, while growth in its services unit — which includes the App Store, Apple Music, Apple TV and other subscription products — is slowing, David Vogt of UBS said in a report. Said Monday dated.
While he raised his price target on the stock from $180 to $190, this implies only a 3% gain from Monday’s close. Vogt said the stock, at 29 times estimated earnings, trades at a 50% premium to the broad market, its most in a decade.
“We do not believe Apple shares offer a compelling risk/reward over the next 6-12 months, particularly in light of soft iPhone, PC and App Store fundamentals,” Vogt wrote.
Apple’s 2023 advance, which lifted the stock to a record for the first time in more than a year, has outpaced the Nasdaq 100 index’s 35% gain.
(Update to add stock moves in third paragraph.)
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