Jefferies downgraded Apple to underperform and cut its price target to $263.66, pointing to supply chain checks that indicate the planned all-glass iPhone has been canceled. Analyst Edison Lee says the cancellation undercuts Apple's push for higher-priced iPhones, leaving the upcoming foldable model as the main lever for higher margins.
Jefferies downgraded Apple to underperform from hold on Monday and cut its price target to $263.66 from $285.56, implying nearly 16% downside from Friday's close. Analyst Edison Lee said supply chain checks indicate the all-glass iPhone due September 27 has been canceled because of low yield.
Canceled iPhone threatens Apple's pricing plans
Apple had planned to extend the all-glass design to future iPhone Pro and Pro Max models, which would have raised their average selling price and margin, according to Jefferies. Jefferies also lowered its earnings-per-share forecast for Apple by 2.1% for fiscal year 2028.
Foldable iPhone becomes the key margin driver
Lee wrote that the setback shows introducing new iPhone form factors to lift average selling prices is harder than expected. According to Jefferies analyst Edison Lee, the foldable iPhone, slated to debut in September 2026, is the "only key driver of higher ASP and margin" in the near term.
However, surging memory costs tied to widening artificial intelligence adoption could push the foldable's starting retail price north of $2,000, Lee said. That could make the device a niche product and limit the upside it offers Apple's stock.
Shares dip as Wall Street mostly disagrees
Apple shares edged down more than 1% in pre-market trading on Monday, though the stock is still up 15% year to date.
Jefferies' call goes against the consensus on the stock market: of the 47 analysts covering Apple, 30 have a buy or strong buy rating, while just three rate it underperform, according to LSEG data.
Source: US Top News and Analysis
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