KeyBanc Sees 18% Downside for Apple Stock Due to Overvaluation

KeyBanc analyst Brandon Nispel has maintained an Underweight (equivalent to Sell) rating for Apple stock, predicting an 18% downside from current levels. He believes the company's premium over the S&P 500 and Nasdaq is unwarranted.

Nispel's estimate of $250 price target falls below Wall Street's forecasts, with the firm expecting Apple to report $506.8 billion in fiscal 2027 revenue, below the consensus estimate of $519.2 billion. The analyst also predicts a lower EPS of $9.01 in fiscal 2027, compared to the consensus estimate of $9.52.

KeyBanc expects only 3.1% of U.S. subscribers to upgrade their phones in the third quarter, a trend that suggests fewer customers are replacing their iPhones during this period. The firm also anticipates weaker device subsidies from carriers, which could lead to slower upgrades and weigh on Apple's Services business.

While KeyBanc forecasts growth in iPhone revenue of 14.7% and iPad revenue of 7.8%, the company expects Mac and Wearables revenue to decline by 1.6% and 7.3%, respectively.