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What Wall Street expects from Apple’s iPhone event
Analysts are broadly optimistic on Apple – but they’re not expecting its upcoming product launches to rescue the stock or boost demand all of a sudden. Several Wall Street firms reiterated their stances on Apple stock ahead of the tech titan’s “It’s Glowtime” event on Sept. 9, when the company is expected to launch its iPhone 16 . Analysts also expect the tech giant to highlight its artificial intelligence capabilities through its “Apple Intelligence” software, which should be available to the public later this year rather than alongside the new iPhone hardware. Indeed, on Tuesday UBS analyst David Vogt and Piper Sandler analyst Matt Farrell stuck with their neutral ratings on the stock. Vogt is looking for Apple to play up its AI initiatives but doesn’t think it’ll create substantial buzz around the stock. The analyst said he doesn’t “expect anything revolutionary from the hardware changes” alone. He kept his $236 price target on shares, which implies a potential 5.9% gain from Tuesday’s close. “While the market is bullish on the possibility of a strong replacement cycle, we don’t view the AI related offerings as compelling enough in the near term to drive significant demand, particularly given regional headwinds like increased competitive pressure in China and regulatory hurdles in the EU and China that are not likely to be resolved in the near term limiting the geographic reach of Apple Intelligence,” Vogt said. He added that iPhone sell-through levels this fall will be critical to gauge demand. AAPL YTD mountain Apple stock. Piper Sandler’s Farrell, meanwhile, has a price target of $225 — that is, upside of 1% —as he waits for further AI updates from the company. “We continue to believe a lot of the near-term excitement is built into the stock,” he said a research note. “From our perspective, the key takeaways from the event being Apple Intelligence rather than the iPhone hardware updates would be a positive for the potential ‘super cycle.'” He noted that he’s also watching for iPhone 16 pricing, especially as cracks in consumer spending emerge across all income levels. Similarly, Bernstein’s Toni Sacconaghi views the stock’s “risk-reward coming more into balance” as Apple trades at the high end of its historical valuation range. Goldman Sachs is slightly more optimistic about Apple in the long run, on the other hand. On Tuesday, the firm reiterated its buy rating and $276 price target on the iPhone maker. That suggests potential upside of nearly 24%. Like other analysts though, Goldman’s Michael Ng does not think the upcoming event will be a catalyst to the stock price. This year, Apple shares are up nearly 15%, but they’re already down more than 3% to kick off September. Apple’s share price tends to move higher as hype builds up ahead of its fall product launches. However, the stock’s lowest average returns occur during Septembers — the month of the launches. Over the past 10 years, Apple shares averaged a September loss of 3.5%. That decline follows average gains of 6.5% in July and 4.8% in August, according to FactSet. “In the past 5 years, AAPL stock underperformed the S & P 500 by an average of 70 bps on the day of the iPhone announcement, and we expect this year’s event to be similarly immaterial to the stock price,” Ng said. Still, Ng believes that new product innovation in the iPhone 16, such as larger display sizes and better camera features, along with its new AI features should drive upgrades and installed base growth. He forecasted iPhone revenue to decline 1% year over year in 2024, but thinks it should grow 9% in 2025 and 2026 on a year-on-year basis.
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