Jefferies Downgrades Apple Stock as Component Costs Soar and ASP Prospects Dim

Apple's stock price has been hovering around $300 since its quarterly earnings report was released. However, Wall Street's bearish sentiment toward Apple is accelerating.

Jeefferies downgraded Apple to an 'Underperform' rating and lowered its price target from $285.56 to $263.66, representing about 14% downside from the current stock price of $306.

Jefferies analyst Edison Lee pointed out that supply chain checks show Apple has canceled its 20th-anniversary all-glass iPhone model due to poor production yields. He believes this signal indicates that Apple's difficulty in raising the iPhone's average selling price (ASP) by introducing a new form factor is far greater than expected.

TrendForce stated that the component cost of the 256GB iPhone 18 Pro will rise by about 38% compared to last year's iPhone 17 Pro, leading to an 'inevitable' increase in retail prices.