Apple Shares Drop Lower After Rating Downgrade From Band Of America
In a shocking turn of events, the shares of Apple dropped by 4.9% after a rating downgrade from the Bank of America. It's been a long time since any financial institution such as the Bank of America has done something like this for the tech giant Apple!
After the rating downgrade, the analysts from Bank of America changed their view of Apple from BUY to neutral. On top of that, the analysts have also lowered their price target of Apple to $160 from $185. Some of the reasons for this rating downgrade were the macroeconomic challenges and the weaker consumer demand.
With talks of recession in the USA, it is only natural for the experts to express their caution for the tech stocks such as Apple and Google.
Apple Slowing Down iPhone 14 Production
After the decline in Apple's stock, the broader market sentiment also turned lower, which caused the S&P 500 to also register a loss of 2.1%!
Earlier, some reports appeared online that hinted that Apple had abandoned plans to increase the production of the iPhone 14 (the new flagship product). This is an indication that the actual demand for the product was much lower than anticipated. This is also a reason which has dented the outlook of Apple's stock.
However, Rosenblatt Securities has a different view than that of the Bank of America... They have actually raised their rating of Apple stock to BUY from neutral. Furthermore, they have also raised Apple's price target from $160 to $189 - If this turns out to be true, it would add 25% to Apple's current stock price!
Rosenblatt Securities have based its views on a recent survey that involved the opinion of around 1000 US-based adults. They all expressed a strong demand for the new Apple products despite the higher price tag!
Considering the current economic conditions and high inflation, it might be plausible that the demand for the new iPhone 14 might be lower than the earlier models such as Apple 13 and Apple 12. Furthermore, maybe the consumers do not have enough reasons to upgrade to a newer phone model yet. Whatever the reason, it will become clear within the next few months!