KeyBanc Analyst Warns of Negative iPhone Pricing Catalyst for Apple Stock
Apple's (AAPL) stock price has dropped in pre-market trading on Friday ahead of its September 9 iPhone event, and analysts are sounding warning bells. KeyBanc analyst Brandon Nispel believes that the company's pricing plans for the new iPhones could be a 'negative catalyst' for shares.
Nispel expects Apple to raise prices on its iPhones, which could help deal with higher costs and protect gross margins but also risk making customers less willing to upgrade. He notes that this could lead to 'sticker shock' and lower iPhone sales. Nispel also points out that Apple's shares have seen a modest negative reaction after the company's September events in the past.
Apple has already received one bearish call from Jefferies analyst Edison Lee, who downgraded the stock to Underperform due to concerns about rising memory costs and the cancellation of a reported all-glass iPhone model. The average price target on AAPL is $339.94 per share, implying 3.58% upside potential.
Nispel reiterated an Underweight rating and a $250 price target on Apple stock, indicating 24% downside from current levels. He warns that neither option of raising prices more selectively or raising them all at once is a 'great outcome' for the company.