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Apple Downgraded by Oppenheimer as iPhone Sales Slow, China Market Shrinks

Jan 29- Shares of Tech Gaint Apple (AAPL, Financial) remained low on early trading on Wednesday, losing 1.5%share value after Oppenheimer downgraded shares from “Outperform” to “Perform”, saying longer-term prospects are weaker than previously expected on iPhone sales projections that have come in weaker than polled estimates and increasing competition in China. The firm also tweaked its view on Apple’s valuation and short-term growth prospects, cutting its previous $250 price target due to worries about the firm.

The EBITDA margin, however, climbed year on year, and Oppenheimer cut the fiscal year 2026 earnings per share (EPS) estimate by 4% to $7.95, below the consensus estimate of $8.23. Firm drops Apple revenue forecast to $438 billion in FY26 from $456 billion. The revisions were blamed on iPhone demand slowdown, and analysts lowered their projected shipment growth for FY25 to 2% from 5% and kept an outlook of 2% for FY26.

Apple’s falling market share in China is a major concern: iPhone shipments in Q4 dropped 25%, and the full year 2024 fell 17% for the iPhone, Canalys said. With local Android manufacturers pressuring Apple’s dominance, market share dropped from 19% to 15%.

Apple will likely struggle to maintain premium valuation and revenue momentum in the years ahead as it battles with competitive headwinds and sluggish iPhone sales, analysts warn.

This article first appeared on GuruFocus.


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