Apple Stock Slumps on Jefferies Downgrade, Price Target Cut to $263.66

Apple's stock price has fallen significantly after Jefferies analyst Edison Lee downgraded his rating on the company to Underperform from Hold. The move was made after supply chain checks revealed that Apple would be canceling an all-glass iPhone model scheduled for release on September 27, due to low manufacturing yields.

Lee's revised financial model shows a significant impact on Apple's earnings per share projections for fiscal 2028 and 2029, with a 2.1% reduction in EPS for 2028 and a 3.4% reduction for 2029. He also applied an 8% reduction to his DCF-based valuation, resulting in a new price target of $263.66.

The cancellation of the all-glass iPhone model is seen as a major setback for Apple's push towards higher-priced models, particularly with increasing memory costs across the industry. Lee warned that this could lead to pressure on future product cycles.

Additionally, Apple recently raised its trade-in values by around 5% in the US and 2% in European markets, which could accelerate iPhone purchases but also risk thinning out the buyer pool for future models.