Don’t let a Wall Street analyst’s downgrade of Apple scare you out of the stock
Jefferies on Monday downgraded Apple. Edison Lee, a top analyst at Jefferies known for frequent ratings and price target changes, cut the stock to a sell-equivalent from hold. He also lowered his Apple price target to $263.66 per share from $285.56, implying nearly 16% downside from Friday’s close. Lee cited supply chain checks showing that Apple’s “20th anniversary all-glass iPhone” — speculated for launch in September 2027 — has been canceled due to production challenges. Lee estimated that all-glass models would have an average selling price (ASP) of $2,060. The analyst called the move a “major setback to efforts to bring in higher-priced iPhones amid soaring memory costs.” Apple does not publicize ASPs — but for ballpark comparison, a 256GB iPhone 17 Pro Max starts around $1,200. Lee also said Apple’s decision to raise iPhone trade-in values by 5% in the U.S. could pull forward demand ahead of the iPhone 18 launch next month. Here’s why investors should ignore the call. First, we’re always hesitant on equity research based on supply chain checks. “I’m always wary of these … readings because it’s kind of a black box where they get their data,” Club portfolio director Jeff Marks said during Monday’s Morning Meeting. Plus, Apple has never even announced an all-glass model. “This is just speculation on both ends,” he added. “If their supply chain ratings were so good, well then, I’d argue they should have been more positive on the stock at some point in the past 12 months,” Jeff said. “It has been a strong performer.” Including Monday’s more than 2% decline on the Jefferies downgrade, Apple is up more than 30% over the past 12 months. AAPL YTD mountain Apple (AAPL) year to date performance Second, Jefferies has changed its ratings too frequently for our liking. The analysts did so six different times in 2025, and twice so far in 2026. Retail investors should not trade Apple stock like that. That’s for hedge funds. There’s an immense amount of expertise required to time the market on the way out and back in. Jim Cramer shared the same advice when Lee last downgraded Apple to a sell in October 2025. “People at home, I urge you not to listen.” He added, “I think owning is much better.” We still feel that way now, with our hold-equivalent 2 rating on Apple stock and a $340 price target, which would take us back to its last record high close on July 28. Moving forward, Apple still has so much going for it. The tech behemoth is expected to unveil the iPhone 18 series, along with its highly-anticipated foldable iPhone, during its annual launch event in September. The new AI-powered Siri is slated for public release in the fall as well. These are compelling reasons for loyal users to upgrade or trade in their iPhones – Apple’s biggest money maker and what Jim has consistently called the greatest product in the world. To be sure, there are also some changes coming next month. On Sept. 1, Tim Cook steps back into an executive chairman role, turning the CEO job over to John Ternus, the company’s current hardware chief. Additionally, we are expecting iPhone price hikes due to the ongoing global memory shortage — following bigger-than-expected price hikes on MacBooks and iPads in late June. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
