Jefferies has become the latest research firm to downgrade Apple (AAPL) stock, believing the company is nixing a 20th anniversary iPhone that was expected to help bolster the device’s price.
On Monday, Aug. 10, Jefferies analyst Edison Lee wrote that his firm’s supply-chain checks suggest that because of low yield, Apple won’t be going forward with an all-glass iPhone, which he called “a major setback to efforts to bring in higher-priced iPhones amid soaring memory costs.”
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Apple’s iPhone Issue
The 20th anniversary iPhone was expected to help the tech giant raise the average selling price (ASP) and margins on its ubiquitous smartphone. Jefferies estimated that the special-edition gadget would’ve fetched a blended retail ASP of $2,060 upon its launch, which likely would’ve been in September 2027.
Lee also believed the plan was to extend the all-glass features to future iPhone Pro and Pro Max models, improving their ASPs and margins for years to come.
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“We believe this shows that introducing new form factors in the iPhone to drive higher ASP is more difficult than expected,” he writes. “The foldable iPhone will now be the only key driver of higher ASP and margin. However, soaring memory cost would drive the starting retail price of the 18 Fold to $2,199 (256GB storage), rising to $3,099 for the 2TB version, on our estimates. We still believe such an expensive phone would be a niche product. We forecast 14 million unit sales of iPhone 18 Fold in FY28.”
Apple is struggling mightily with skyrocketing memory costs. It has already been forced to hike prices by 20% on its Mac and iPad products, announced in June, but it hasn’t yet done so on the iPhone. Jefferies believes AAPL will “struggle to balance volume and margin in the next 18 months.”
| Apple (AAPL): Quick Stats | |
|---|---|
| Market cap | $4.6 trillion |
| Dividend yield | 0.3% |
| Forward price-to-earnings (P/E) | 32.9 |
| Price/earnings-to-growth (PEG) | 2.53 |
| Source: Yahoo! Finance. Data is as of Aug. 9, 2026. | |
Jefferies cut its estimated compound annual growth rate (CAGR) on the iPhone ASP from 9.0% between fiscal 2026 and 2031 to 6.8%, and cut its 2028 and 2029 earnings per share (EPS) estimates by 2.1% and 3.4%, respectively.
The downgrade to Underperform (Jefferies’ equivalent of Hold) includes an 8% price-target cut, to $263.66 per share, implying about 16% downside from last Friday’s closing price.
Wall Street broadly is a bit warmer on AAPL stock, but not much.
According to data from S&P Global Market Intelligence, the company currently enjoys 27 Buy-equivalent ratings versus 14 Holds and five Sells—a steep decline in bullishness since May that can largely be chalked up to Apple’s rising price (and rising valuation). The company now trades at 33 times earnings estimates and at a price/earnings-to-growth ratio of 2.5 (anything above 1 is considered overpriced). A consensus target price of $322.28 is just 3% higher from current levels. However, they do see Apple generating a respectable 11% average annual earnings growth rate over the next three to five years.
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