Apple Inc. (NASDAQ:AAPL) shares are in the crosshairs after KeyBanc Capital Markets downgraded the iPhone maker to Underweight from Sector Weight, slapping a $250 price target on a stock that closed at $317.31 on Monday.
The call implies roughly 21% downside and marks a notable shift from a firm that has been tracking Apple’s U.S. demand trends through its proprietary Key First Look Data (KFLD) series.
- AAPL stock is down. See the chart and price action here.
KeyBanc’s June KFLD shows indexed hardware spending down 2% month-over-month, a sharp miss versus the three-year average of +9%, and another data point suggesting Apple’s U.S. hardware growth is normalizing after last year’s tariff‑driven demand pull‑forward.
Year-over-year indexed spending did improve to +4% from -6% in May, but for the June quarter (C2Q), KFLD was still -2.7% sequentially and -3% year-over-year, versus +6% a year ago. That backdrop is at odds with consensus expectations for Apple to deliver above‑trend hardware growth in the current fiscal third quarter.
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Historically, Apple’s fiscal third-quarter hardware revenue falls about 9.7% quarter-over-quarter. Today, Street models are looking for just a 4.3% decline, while KeyBanc’s own forecast is a more modest 1.8% drop, implying Apple is outperforming outside the U.S. and potentially building inventory domestically ahead of a changed iPhone 18 release cadence.
With management guiding to 14% to 17% total revenue growth year-over-year in Q3, KeyBanc models hardware revenue growth of roughly 18% year-over-year, above consensus at 15% but driven by higher average selling prices rather than sustainably stronger units.
That’s where the downgrade bites. KeyBanc argues that price hikes across iPad and Mac — $100 to $200 on iPad, $100 to $300 on MacBook and $500 to $1,300 on Mac Studio — push demand into a zone where elasticity is greater than one, meaning each incremental price dollar risks more than one unit lost.
KeyBanc sees iPhone revenue up 23.2% in FY26, ahead of consensus at 19.7%, but growth slowing sharply to 4.9% in FY27 versus Street at 8.3%.
As hardware unit growth cools, the firm also cuts back its Services view, modeling FY27 Services growth decelerating to 7% versus consensus near 12%.
With Apple trading at about 24.5x FY27 EV/EBITDA and roughly 35x forward earnings — more than two standard deviations above the S&P 500 and Nasdaq — KeyBanc argues the multiple no longer fits a maturing, slower‑growth hardware and services story.
AAPL Stock Price Activity: Apple stock was down 1.12% at $313.77 at the time of publication Tuesday, according to data from Benzinga Pro.
Over the past month, AAPL has gained about 6.7% versus a 0.1% decline in the S&P 500 and is up roughly 15% year-to-date compared to the index’s 9.6% gain.
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