KeyBanc Downgrades Apple to Underweight, $250 PT

KeyBanc analyst Brandon Nispel downgraded Apple (NASDAQ: AAPL) from Sector Weight to Underweight with a $250 price target.

“We downgrade AAPL to Underweight ($250PT; 19x ’27 EV/EBITDA, 27.5x PE). Our KFLD shows Indexed Spending -2% m/m, which is below the three-year avg of +9% m/m, another month of below-trend growth.

We think expectations NT are reasonable though we see: 1) slowing iPhone builds with price increases, weak U.S. upgrades, and changing device subsidy models; 2) ’27 expectations that likely need to move lower for Mac, iPad, and Wearables; and 3) as unit growth likely slows, so will the growth in Apple’s user base, likely pressuring Services.

At 35x PE, we think AAPL is too expensive for this to occur.

Details on our rationale are outlined inside the note.

In short, we see U.S. carriers pulling back on device subsidies, slowing upgrade rates, and International likely needing to carry more weight, which gets difficult in a rising price environment where we think consensus iPhone growth of 8% in ’27 is too aggressive.

NT numbers seem reasonable.

In addition, given price increases on Mac/ iPad, we see these revenue estimates at risk, but when paired with slower unit growth, results in slowing User growth and drives our Services growth to decelerate to 7% in FY27, much slower than consensus of ~12%.

With Apple trading at ~24.5x our FY27 EV/ EBITDA and ~35x P/E, we think the stock is overvalued relative to history and see its 2+ standard deviation premium to the S&P 500/Nasdaq as unwarranted.

We are updating our estimates based on latest assumptions and views around units and ASPs.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.