Apple shares faced fresh pressure on Monday after Jefferies cut its rating on the tech giant to Underperform from Hold, citing worries about the company’s ability to sustain higher average selling prices for iPhones amid production setbacks and rising costs.
Analyst Edison Lee lowered the firm’s price target to $263.66 from $285.56, implying roughly 16% downside from recent levels. The move adds to a growing list of more cautious views on the world’s most valuable company.
Jefferies pointed to supply-chain checks indicating that Apple has canceled plans for a Twentieth anniversary all-glass iPhone model originally eyed for a September 2027 launch. The cancellation stemmed from poor production yields. The firm described the decision as “a major setback” to Apple’s efforts to introduce higher-priced devices at a time of soaring memory costs.
According to the note, Apple had intended to extend all-glass design features to future iPhone Pro and Pro Max models to further lift average selling prices and margins. With that path now in doubt, Jefferies reduced its estimated compound annual growth rate for iPhone ASPs between fiscal 2026 and 2031 and cut its fiscal 2028 and 2029 earnings-per-share estimates by about 2% and 3%, respectively.
Lee also flagged recent increases in trade-in values for iPhones in the U.S. and Europe. While those moves could pull forward demand for the current iPhone 17 cycle, they risk creating greater pressure on sales of the subsequent iPhone 18 generation.
The downgrade comes as analysts continue to debate Apple’s long-term smartphone growth trajectory, particularly its capacity to drive premium pricing and volume expansion in a competitive market. Sell-equivalent ratings remain relatively scarce among the broader analyst community, but the latest cut underscores mounting scrutiny of Apple’s hardware roadmap.
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