Another investment bank downgraded Apple (AAPL.US)! The 20th anniversary version of the all-glass iPhone has been cancelled, and Jefferies warns that it is “harder than expected” to raise the price by relying on a folding screen

The Zhitong Finance App noticed that Apple (AAPL.US) was downgraded by investment bank Jefferies to “outperform the market”. This is the latest example of the market's growing bearish sentiment towards the company.

Jefferies analyst Edison Lee expressed concern about the future of Apple's iPhone, particularly about the company's ability to drive higher average selling prices (ASP) over time.

He wrote in the report that supply chain checks showed that the company “has cancelled the 20-year-old all-glass iPhone model due to poor production yield.” “This shows that introducing a new morphological factor into the iPhone to drive up the average selling price is more difficult than expected.”

Earlier, according to various sources, Apple plans to launch another new phone with a breakthrough design on the 20th anniversary of the iPhone next year. The next iPhone Pro series plans to use a four-curved display with almost no borders, and the screen will extend around the body to provide a more integrated visual effect.

Folding screens may become niche products

Edison Lee wrote that the folding screen iPhone, which is expected to be launched for the first time by Apple next month, “will now be the only key driver to drive higher average sales prices and gross margins in the next few years.” However, the sharp rise in the price of key components such as memory chips will drive up the pricing of this product, and “we still think that such an expensive phone will be a niche product.”

Jefferies previously rated Apple stock as “hold,” and while downgrading the rating, it lowered its price target from $285.56 to $263.66. Apple shares closed at $313.33 last Friday.

According to the data, there are currently six agencies that have given Apple a rating equivalent to “sell.” This number tied the record high since 2012. Last month, KeyBanc Capital Markets downgraded the stock to “underrated” due to concerns about demand and valuation.

KeyBanc pointed out that US carriers are generally reducing mobile phone subsidies, which will directly inhibit the speed of iPhone upgrades. The agency believes that the market's general expectation of an 8% increase in iPhone sales in fiscal 2027 is “too aggressive.”

Furthermore, as Apple's most important growth engine and source of profit in recent years, the service business is facing the challenge of declining growth. KeyBanc predicts that the slowdown in iPhone sales will slow down the annual growth rate of the service business to 7%, which is significantly lower than the general market forecast of 12%.

Cautious feelings about Apple are growing

Analyst consensus rating falls to lowest level since 2019

Overall, the overall recommended rating, which is an alternative measure to buy, hold, and sell ratings, dropped to 3.88 (out of 5), the lowest level since 2019. Less than 60% of analysts recommended buying the stock, which is far lower than similar large-cap stocks such as Microsoft, Amazon, and Nvidia, all of which received more than 90% institutional support.

Apple shares fell 1.3% in pre-market trading on Monday. By Friday's closing price, the stock was down about 8% from its recent high. The recent decline in stock prices came after Apple released its quarterly earnings report, when the company gave disappointing sales forecasts due to a shortage of spare parts.