Apple Share Price Target Lowered On ‘Structurally Challenged Sector’

Apple (NASDAQ: AAPL) shares rose 0.4% in Monday's session, despite Bernstein analyst Toni Sacconaghi cutting the firm's price target on the stock.

Sacconaghi lowered the price target on Apple to $125 from $170, maintaining a Market Perform rating on the shares.

The analyst told investors in a research note that he sees IT hardware as a “structurally challenged sector,” with continued macro uncertainty into 2023. As a result, Sacconaghi said investors should begin the year by looking for names with “attractive valuations, good earnings visibility, and a track record of strong execution.”

Furthermore, he added that iPhone revenues this year will likely disappoint, creating the potential for downward estimate revisions, while the tech giant “appears expensive relative to other FAAMG and large cap tech names.”

The sentiment is in contrast to Tigress Financial analyst Ivan Feinseth's note last week, in which he said the current macro challenges “create a long-term buying opportunity” for the stock.

The analyst reiterated a Strong Buy rating and $210 price target on Apple shares. He argued that the company's “full-year 2023 business performance trends will continue to show a solid and resilient business model driven by the strength of its ecosystem, unmatched customer loyalty, record sales levels across almost all product lines, and an active installed base of devices and paid subscribers at an all-time high.”

According to the analyst ratings website TipRanks, 22 out of 27 analysts have a Buy rating on Apple, with five at Hold. In addition, the average price target is $174.71 per share, representing a potential 32% upside for the stock.