Apple Valuation Under Pressure as Services Growth Slows

Apple's valuation is facing growing scrutiny as its services growth cools. The company's stock is trading at a premium multiple of 34.6x P/E, above its three-year average of 28x. One fair value model signals a potential downside of -9.4% to $276.63.

The slowdown in services growth has raised concerns about the durability of this engine, which has been supporting Apple's premium multiple. The company's services revenue growth slipped below 10% year-over-year for the first time since June 2023, missing at least one major estimate.

Analysts are increasingly echoing KeyBanc's thesis that price-driven growth should command a lower valuation multiple than volume-driven growth. Barclays has maintained an Underweight rating with a $230 price target, while Morgan Stanley has reduced its Overweight rating to $360, citing slower services expansion and margin pressure.