Apple Stock Valuation Suggests Overpricing, Jefferies Warns

Jefferies has reconfirmed its Underperform rating on Apple Inc. (AAPL), setting a price target of $263.66. This valuation suggests that the stock is overpriced relative to its Fair Value, according to InvestingPro data.

The firm commented on Apple's recent launch of new iPhone models, including the iPhone 18 P/PM and Duo foldable device. While the Duo's pricing aligns with Jefferies' earlier estimates, the addition of a 256GB version at $1,999 may impact sales. In contrast, the iPhone 18 P/PM saw price reductions for its higher-capacity versions.

Jefferies believes Apple is prioritizing volume over profit margins. This strategy could drive strong demand but put pressure on the company's gross profit margin of 48.65%. The unchanged pricing on older models may also contribute to this trend.