Apple Stock Gets Downgraded to Sell Ahead of Earnings: Should Investors Be Worried?
KeyBanc cut Apple stock's rating to the equivalent of a Sell last week on concerns over iPhone 16 sales. Here's what that means.


Apple (AAPL) stock is gained ground Friday even after financial services firm KeyBanc downgraded the Magnificent 7 stock to Underweight (equivalent to a Sell) from Standard Weight (equivalent to a Hold), with a price target of $200.
Apple has been on a roll in 2024, up 21% for the year to date, to make it one of the best-performing Dow Jones stocks. But KeyBanc analyst Brandon Nispel is concerned about iPhone 16 sales. He thinks customers will favor buying the new lower-priced iPhone SE model, which is expected to launch in early 2025, over the costlier iPhone 16, according to Barron's.
The iPhone 16 price ranges from $799 to $1,199, while the iPhone SE 4 is expected to cost around $499, by some estimates.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Nispel cited a recent survey that found 59% of respondents said they were interested in upgrading to the iPhone 16, and of those likely or extremely likely to upgrade, 61% indicated interest in the iPhone SE.
"This shows the iPhone SE isn't incremental, and could possibly be cannibalistic to iPhone 16 sales," the analyst said, adding that a successful launch of the iPhone SE would lead to an increase in iPhone units sold but a decline in average selling prices.
Nispel's $200 price target represents a discount of about 14% to current levels.
Apple could do well in China's thriving smartphone market
On a positive note for Apple, smartphone shipments in China rose 3.2% year over year in the third quarter, marking its fourth consecutive quarter of expansion, according to the International Data Corporation's Worldwide Quarterly Mobile Phone Tracker.
Apple came in second for smartphone companies, driven by the launch of its new iPhone 16 series, and its artificial intelligence (AI) model Apple Intelligence is expected to drive future demand.
"A significant wave of device upgrades is propelling the sustained recovery of the Chinese smartphone market," IDC senior research analyst Arthur Guo said in a statement. "Despite ongoing economic challenges, consumers are highly motivated to purchase new smartphones after three years of pent-up demand."
Apple is still a Buy for most of Wall Street
The majority of Wall Street remains bullish toward the blue chip, suggesting investors shouldn't be too worried about KeyBanc's downgrade of one of Warren Buffett's favorite stocks.
According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $239.82, representing implied upside of roughly 3% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm CFRA is one of the more bullish outfits on AAPL stock with a Buy rating and $260 price target.
Looking ahead to Apple's upcoming earnings event, slated for after the close on Thursday, October 31, CFRA Research analyst Angelo Zino is expecting year-over-year services growth of 13%, "while anticipating more insights around the rollout of AI (initially only available in English), with international expansion to be a bigger story in calendar year 2025 and calendar year 2026."
Zino adds that "AAPL could refresh its Macs this fall, with internal M4 processors, while Wearables is set to return to growth given recent upgrades to the Watch and AirPods product lines."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
April RMD? Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Last updated
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
How Much Does Being Rich Matter in Retirement?
After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
By Christy Bieber Published
-
The Three Biggest Fears Keeping Retirees Up at Night
Here are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
By Pam Krueger Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
Estate Planning When You Have International Assets
Estate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
By Kelsey M. Simasko, Esq. Published
-
Microsoft Stock: Innovation Spurs Its 100,000% Return
Microsoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
By Louis Navellier Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
Stock Market Today: Dow Sinks 715 Points as Inflation Unrest Grows
Inflation worries are showing up in both hard and soft data.
By Karee Venema Published