Apple Inc. (AAPL) received some big downgrades and price target cuts on Wednesday, continuing the recent trend of less-than-optimistic analyst views on the former Wall Street darling.
Analysts at Berenberg downgraded AAPL from “Buy” to “Sell” saying that the smartphone investment is dead. Berenberg’s view wasn’t solely focused on Apple; the firm cut its rating on Samsung as well.
“The smartphone investment of the past three years is now a smartphone trade. This is very similar to what happened in the handset industry a decade ago, when volumes topped out in developed markets and were led by growth in emerging markets,” said Berenberg analyst Adnaan Ahmad.
Ahmad went on to say that Apple’s margins have peaked and expects them to decline from 45%-50% to 35% in the next three years.
Berenberg is not the only firm to issue a cautious view on the tech giant; Citigroup analysts said they were cutting the price target on Apple. The analysts maintain a “Neutral” rating on AAPL and see shares reaching $480, down from the previous target of $500. This new valuation suggests an 11% upside to Tuesday’s closing price of $431.14.
The Citi analysts went on to say that they believe Wall Streets expectations for iPhone 5 and iPad sales are too high. They believe that the demand for Apple’s product is on the decline as the company continues to fight for market share.
Apple shares were down $4.14, or -0.96%, during Wednesday morning trading. The stock is down -19.53% over the past twelve months.
The Bottom Line
Shares of Apple Inc. (AAPL) have a dividend yield of 2.48% based on Wednesday’s intraday trading price of $428.27 and the company’s annualized dividend payout of $10.60 per share.
Apple Inc. (AAPL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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