Apple (AAPL.US) was downgraded to “owned” by Loop Capital: iPhone shipment cuts may be difficult to make up for, and the valuation is at a five-year high

The Zhitong Finance App learned that Loop Capital downgraded the Apple (AAPL.US) rating from “buy” to “hold” on the grounds that iPhone shipments have been cut. “The point is: Apple previously cut iPhone shipments in the September and December quarters by 10%, and we thought at the time that since these cuts were supply-side reasons (memory and processor) rather than demand-side reasons, they would be able to make up for many (if not most) of these cuts before the 2027 natural year,” Ananda Baruah, an analyst at Loop Capital, wrote in a report to customers. “But that doesn't seem to be the case anymore. Furthermore, although this is not the main point of our opinion today, we acknowledge that as memory costs continue to rise, there are downside risks to gross margins.”

He continued, “We are still optimistic about Apple's long-term share growth and service business story... but think that after the recent rise in stock prices, this stock also needs a fundamental catalyst reset... especially considering that iPhone shipments have been cut and gross margins may face additional pressure, its valuation is at a five-year high.”