Why One Analyst Is Concerned the Day Before Apple’s Earnings Report

Shares of Apple (AAPL) have surged roughly 40% over the past nine months, but one analyst said it’s time to tap the brakes ahead of the company’s earnings report scheduled for Thursday. 

Ten of the 16 analysts who follow Apple and are tracked by Visible Alpha have a “buy” or equivalent rating for the iPhone maker, and the consensus price target of about $246 represents about a 3% premium over the iPhone maker’s late Wednesday price of about $239. 

Then there’s Oppenheimer, which downgraded Apple to a neutral “perform” rating Wednesday and reduced its iPhone sales estimate over the next 12 to 18 months. Apple is facing the “twofold challenge” of increased competition in greater China and an Apple Intelligence rollout that the brokerage firm says has been insufficient to drive consumers to upgrade their devices. 

Worries Over Apple’s China Sales

Concerns over Apple’s performance in China have surfaced in recent weeks, particularly after data from technology research firm Canalys showed the iPhone maker’s 2024 shipments slumped 17% in the country, the Oppenheimer report said. Additionally, the latest iPhones sold in China aren’t equipped with Apple Intelligence features due to Chinese regulatory hurdles.

Apple is expected to report fiscal first-quarter earnings after the market closes Thursday. Analysts tracked by Visible Alpha as a consensus expect sales in China (and the rest of Asia, excluding Japan) to have risen just 2% year-over-year to $31.65 billion.