Exane BNP Paribas Downgrades Apple (AAPL) to Neutral, 'Hard to justify a premium valuation'
Exane BNP Paribas analyst Jerome Ramel downgraded Apple (NASDAQ: AAPL) from Outperform to Neutral with a price target of $140.00.
The analyst comments "Hard to justify a premium valuation - downgrading to Neutral The stock has been fairly resilient in the current market and is trading at 22x our FY23e EPS, i.e. 10% above its 5-year average with EPS CAGR at ‘only’ 9% over FY23-FY25e. Though Services is still growing (8% CAGR 22-25e), growth is expected to be well below the 21% CAGR over the last 5 years. Thus, we see little reason why Apple should trade at a premium vs its platform peers (now at 22x FY23e PE). As new Hardware products such as AR/VFR and Apple Car might not come before 2024-26, we see no major positive catalyst for the stock and believe the shares are fairly priced. We downgrade the stock to Neutral with a lowered TP of USD140 (from USD180) based on 22x FY24e PE (vs 26x previously)."
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Shares of Apple closed at $129.91 yesterday.