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Apple shares fell 1.7% on Tuesday following the company’s product launch event. (Photo by Eric Thayer/Getty Images)
Apple
‘S
The long-awaited launch of the iPhone 15 has left investors disappointed, and Wall Street doesn’t seem thrilled either.
The world’s most valuable company unveiled its new iPhone models on Tuesday, and things went pretty much as expected. The only surprise was the lack of a price increase for the iPhone Pro, which was widely expected by analysts
Apple
raised the starting price of the Pro Max by $100.
According to market data from Dow Jones, Apple shares (ticker: AAPL), which fell 1.7% to $176.30 on Tuesday, have risen an average of 5% in the three months since the iPhone’s launch. In pre-market trading on Wednesday,
Apple
shares fell 0.5% to $175.47.
DA Davidson analyst Tom Forte doesn’t see a boost for Apple shares after the latest phone launch. “Unlike in past years, we believe the company may not be able to rely on strong iPhone sales to drive its stock price higher,” he wrote in a note Wednesday.
Forte noted that management was driving a revenue decline in the September quarter, despite the iPhone 15’s September 22 release date. He also cited “lackluster sales potential” in China. He reiterated a neutral rating on Apple shares and a price target of $180.
KeyBanc analysts, led by John Vinh, also viewed the product launch as “slightly negative” for the stock, but maintained an Overweight rating and a $200 price target.
“We view the September event as a modest negative for Apple, given the lack of an expected price increase for the Pro model, features that lack compelling motivation for consumers to upgrade, and slightly less aggressive promotions from carriers “, they said.
Analysts at Evercore ISI considered the event “slightly disappointing” and said that a price increase for the Pro would help mitigate the impact of the recently launched new Huawei smartphone.
“Investors typically come into this event with relatively low expectations given that it’s been a long time since we’ve seen a major change in the iPhone’s design or features, but investors were hoping to see a $100 increase on the cost of the Pro, which would have helped offset any hurdles resulting from the launch of Huawei’s Mate 60 Pro,” they said. They still have an Outperform rating on the stock, with a $210 price target.
Not everyone saw the launch event in a negative light. Wedbush analyst Dan Ives raised his price target on Apple shares from $230 to $240, maintained an Outperform rating and said the upgrade cycle over the next year will surprise to the upside. He wrote that no price increase for the iPhone 15 Pro was a surprise, but that the increase for the Pro Max was a “smart strategic move.”
He expects a greater percentage of consumers will shift to the Pro models from the base model, in a split of 75% to 25%, compared to the 60% to 40% seen in recent years – a “major benefit” for the average sales of the company. price.
“We believe the robust consumer products cycle continues globally for Cook & Co. despite the noise, with the iPhone 15 giving Apple further momentum heading into the all-important holiday season,” Ives wrote.
Analysts at Citi also saw the positives, noting that “fixed pricing on the three models could help lift the units in a challenging macroeconomic environment.” They said Apple is more focused on maximizing gross profit per unit from consumers migrating to premium phones, adding that the iPhone 15 would drive higher premiumization than the iPhone 14 lineup. They maintained a buy rating on Apple shares with a price target of $240.
Write to Callum Keown at callum.keown@barrons.com