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Apple stock fell 1.7% Tuesday after the company’s product launch event. (Photo by Eric Thayer/Getty Images)
Apple
’s
long-awaited iPhone 15 launch left investors disappointed, and Wall Street doesn’t seem enthused, either.
The world’s most-valuable company unveiled its new iPhone models Tuesday, and things went pretty much as expected. The one surprise was the lack of a price increase for the iPhone Pro, largely expected by analysts, although
Apple
did hike the starting price for the Pro Max by $100.
Apple stock (ticker: AAPL), which fell 1.7% to $176.30 Tuesday, has climbed an average of 5% in the three months following an iPhone release, according to Dow Jones Market Data. In premarket trading Wednesday,
Apple
stock is down 0.5% to $175.47.
D.A. Davidson analyst Tom Forte doesn’t see Apple stock getting a boost after the latest phone launch. “Unlike years past, we believe the company may not be able to rely on strong iPhone sales to drive its share price higher,” he wrote in a note Wednesday.
Forte noted that management was guiding for revenue to decline in the September quarter despite the iPhone 15 release date of Sept. 22. He also cited the “potential for lackluster sales” in China. He reiterated a Neutral rating on Apple stock and a price target of $180.
KeyBanc analysts, led by John Vinh, also saw the product launch as being “slightly negative” for the stock, but maintained an Overweight rating and a $200 price target.
“We see the September event as a modest negative for Apple given a lack of expected price increase for the Pro model, features that lack a compelling motivation for consumers to upgrade, and modestly less aggressive promotions from carriers,” they said.
Evercore ISI analysts viewed the event as “mildly disappointing,” and said a price increase for the Pro would’ve helped mitigate the impacts of Huawei’s recently launched new smartphone.
“Investors typically go into this event with relatively low expectations given it has been a long time since we have seen a major change to the iPhone design or functionality, but investors were hoping to see a $100 bump to the cost of the Pro, which would’ve helped offset any potential headwinds from Huawei’s Mate 60 Pro Launch,” they said. They still have an Outperform rating on the stock, with a price target of $210.
Not everyone saw the launch event in a negative light. Wedbush analyst Dan Ives hiked his price target on Apple stock to $240 from $230, kept 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 hike for the Pro Max was a “smart strategic move.”
He expects a greater proportion of consumers to shift toward the Pro models from the basic model, in a 75% to 25% split, compared with the 60% to 40% seen in recent years—a “major tailwind” for the company’s average selling price.
“We believe the robust consumer product cycle continues globally for Cook & Co. despite the noise, with the iPhone 15 giving Apple additional momentum heading into the all-important holiday season,” Ives wrote.
Citi analysts also saw the positives, noting that “flat pricing on the three models could help lift units in a tough macro 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 range. They maintained a Buy rating on Apple stock with a $240 price target.
Write to Callum Keown at callum.keown@barrons.com