KeyBanc rates Apple Underweight with $250 target, citing 37x FY2027 EPS valuation
AI Market Summary
Apple's fiscal Q3 beat masked weaker underlying profitability after excluding a $0.11/share tariff refund. Management flagged supply constraints, FX headwinds, and higher memory costs, while KeyBanc argues price hikes and reduced carrier subsidies could lengthen upgrade cycles, pressure hardware units (non-iPhone -15% to -25%), and eventually slow Services growth. Elevated valuation versus history amplifies sensitivity to any growth deceleration.
Impact level
● Medium
Affected assets
NCSKAAPL2USD/USDT-0.06%
AI Insight · NCSKAAPL2USD/USDTAI Insight
▼ Bearish
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Apple reported fiscal 2024 third-quarter earnings per share of $2.02 on revenue of $109.42 billion, both ahead of market expectations. KeyBanc said the EPS included a $0.11-per-share benefit from tariff refunds, leaving underlying profitability under pressure once that item is excluded. The firm estimates non-iPhone hardware unit shipments could fall 15%–25% year over year and argues Apple’s valuation—about 37 times FY2027 EPS—is well above its three-year average. KeyBanc maintains an Underweight rating and a $250 price target, implying about 19% downside.
