According to Morgan Stanley, the outlook for Apple appears to be less certain in the upcoming months. The firm, which holds an overweight rating on the tech giant, has reduced its price target for Apple to $252 from $275, suggesting a potential upside of 14.1% from Tuesday's closing price. This adjustment comes amidst Apple's struggles this year, with shares declining by nearly 12% in 2025, surpassing the S&P 500's 5% downturn during the same period.
Price Target Cut to $252
The firm, known for its positive outlook on the tech giant, has decided to lower its price target for Apple to $252, down from $275, suggesting a potential 14.1% increase based on Tuesday's closing price.
Stock Struggles in 2025
Apple's stock has faced challenges throughout the year, with a nearly 12% decline in 2025, outpacing the S&P 500's 5% decrease over the same period. Analyst Erik Woodring has revised his iPhone shipment projections downward after Apple postponed a Siri upgrade that would integrate artificial intelligence capabilities.
Woodring now forecasts iPhone shipments to reach 230 million in 2025, unchanged from the previous year, and 243 million in 2026, indicating a year-over-year growth of 6%. He noted that with fewer opportunities to enhance iPhone upgrade rates in the next cycle, the path to shortening iPhone replacement cycles will likely be more gradual.
Impact of iPhone Shipments Outlook
Analyst Erik Woodring has revised his iPhone shipment forecast for Apple, citing delays in a Siri upgrade with AI features. He now predicts 230 million shipments for 2025, unchanged from the previous year, and 243 million for 2026, representing a 6% annual growth.
Woodring also highlighted the impact of President Donald Trump's recent imposition of additional tariffs on Chinese goods, stating that this move will negatively affect Apple's earnings. Anticipating $2 billion in increased product input costs this year, Woodring expects a 5% to 6% decline in earnings and revenue for fiscal 2026. Despite Apple's efforts to mitigate tariffs, full cost offsetting without broad tariff exemptions seems unlikely.
Concerns Over Tariffs and Earnings
The recent imposition of additional tariffs on Chinese goods by President Trump is expected to negatively affect Apple's earnings, according to Woodring. Higher product input costs could lead to a 5% to 6% decline in earnings and revenue for fiscal 2026.
However, despite these challenges, a majority of Wall Street analysts covering Apple maintain a positive outlook on the company. Out of 46 analysts, 31 have assigned a strong buy or buy rating to Apple. The average target price of around $250 indicates a potential upside of over 13%. Following Woodring's adjustments, Apple shares saw a slight decline in premarket trading on Wednesday.
Analysts Remain Bullish
Despite these challenges, a majority of Wall Street analysts covering Apple maintain a positive outlook on the company, with 31 out of 46 analysts giving it a strong buy or buy rating.
Positive Average Target Price
The average target price for Apple stands at around $250, indicating a potential increase of over 13% in the future. Morgan Stanley has expressed concerns about Apple's future prospects in the coming months.
Market Reaction to Woodring's Update
Following Woodring's revised forecast, Apple's shares experienced a slight decline in premarket trading on Wednesday.
