KeyBanc cuts Apple to Underweight, cites slowing hardware demand

Investing.com -- KeyBanc Capital Markets downgraded Apple to Underweight from Sector Weight in a note on Tuesday, setting a price target of $250 per share, citing weakening hardware demand data and concerns about 2027 growth expectations.

According to a note from analyst Brandon Nispel, KeyBanc's proprietary spending data, known as KFLD, showed indexed spending fell 2% month-over-month in June, below the three-year average of 9% growth.

The firm said this "another month of below-trend growth" points to Apple's U.S. growth "starting to normalize following last year's tariff-related demand pull-in."

KeyBanc sees key risks, including slowing iPhone builds amid price increases, weak U.S. upgrades and changing device subsidy models; 2027 expectations that likely need to move lower for Mac, iPad and Wearables; and slowing user base growth that could pressure Services revenue.

Nispel expects Services growth to decelerate to 7% in fiscal 2027, well below the consensus of approximately 12%, as unit growth slows across Apple's device lineup.

The analyst added that U.S. carriers pulling back on device subsidies and slowing upgrade rates mean international markets will need "to carry more weight, which gets difficult in a rising price environment," adding that consensus iPhone growth estimates of 8% for 2027 appear "too aggressive."

With Apple trading at approximately 24.5 times KeyBanc's fiscal 2027 EV/EBITDA estimate and around 35 times price-to-earnings, the firm said the stock is overvalued relative to history, calling its premium to the S&P 500 and Nasdaq "unwarranted."

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