US Stock Earnings Preview: Apple Has Been Repeatedly Downgraded by Institutions. Could Its Earnings Report Usher in a Major Setback?

$AAPL is set to release its fiscal Q1 2025 earnings report after the market closes on January 30th, Eastern Time in the United States.

Just a few days ago, Edison Lee, a securities analyst at Jefferies, downgraded Apple's rating from "Hold" to "Underperform" and lowered the target price from $211 to $200.75, indicating a 13% downside potential compared to the closing price last Friday.

According to statistics, Edison Lee is the fifth sell - side analyst to publicly express a bearish view on Apple. The continuous weakness of "Apple Intelligence" is regarded as a key drag factor.

Jefferies anticipates that in the upcoming (fiscal Q1 2025) report, Apple will fail to meet the 5% revenue growth guidance.

Meanwhile, the earnings growth guidance for the current fiscal quarter is only in the "low single - digit percentage," lower than the market - consensus expectation.

Jefferies also revised down its iPhone shipment forecast for the last three months of last year from a 1% increase to a 2% decline. Previous data from IDC showed that iPhone shipments during this period decreased by approximately 4% year-on-year.

Analysts say that due to the overall weakness of the consumer electronics market, the prospects of other Apple products are equally bleak.

The competitiveness of the iPhone in the Chinese market has been continuously declining since the end of last year. The latest report from Counterpoint Research shows that iPhone sales in China plummeted by 18% year-on-year in the fourth quarter of last year, being overtaken by Huawei and Xiaomi in succession.

Edison Lee also pointed out that for the much anticipated "government subsidy for mobile phones" in China, with a price cap of 6,000 yuan, many iPhone models are not eligible for the subsidy.

Regarding the rumored upcoming launch of the iPhone SE4, Jefferies also believes that the demand for this new phone may be lower than expected.

As a phone with only one camera, it is unlikely to compete with the base - model iPhone or Android manufacturers' products. Instead, it will have to compete with the second-hand iPhone 13/14 Pro or Pro Max with a triple - camera configuration.

Edison Lee said that even if the iPhone SE4's selling point includes "Apple Intelligence," consumers are unlikely to pay for this feature, especially in China. Jefferies also warns that the short-term prospects of AI in smartphones are not promising. A third-party survey shows that American consumers also do not consider the AI in their phones "particularly useful."

Against the backdrop of intense industry competition and increased global regulation, can Apple present us with a satisfactory report?

Can it maintain its status as the world's "top investors' choice"? If you have any thoughts about apple , feel free to discuss with me below.$AAPL