UBS Cuts iPhone Sales Forecast For December Amid Stiff Competition From Rivals, Maintains Neutral Rating

After Apple Inc.’s AAPL market share fell in China in the third quarter of 2024, UBS has forecast weaker iPhone sales in the month of December.

What Happened: UBS analyst David Vogt, has lowered iPhone sales forecast for December, citing declining demand and falling market share in China. The brokerage expects weaker iPhone sales to impact Apple’s overall revenue and earnings in the quarter.

The revised sales forecast led to a 2% downward revision in UBS’s revenue estimates for the quarter and a lower EPS forecast. According to UBS, Apple faces intensifying competition from Chinese manufacturers like Huawei and Xiaomi. The analyst maintains a ‘neutral’ rating with a price target of $236 per share.

Why It Matters: Apple’s new intelligence features for the iOS 18, iPadOS 18, and macOS Sequoia 15.1 updates are expected to boost sales as it enters other geographies in 2025. However, Apple’s Chinese competitor Huawei has announced heavy discounts for the New Year on their premium models, challenging the former’s sales performance in this key market.

Apple’s smartphone sales in China slightly declined in the third quarter, resulting in a 15.6% market share. Meanwhile, Huawei significantly increased its market share to 15.3%, while Vivo took the top spot with 18.6%.

What Are Other Analysts Saying: According to Benzinga, AAPL has a consensus ‘buy' rating with a price target of $245.27 per share based on the ratings of 30 analysts.

The highest price target out of all the analysts tracked by Benzinga is $325 issued by Wedbush Securities maintaining its ‘outperform’ rating on Dec. 26, 2024. Wedbush Securities projects a 26% upside for Apple stock, driven by an AI-fueled iPhone upgrade cycle expected to last through 2025.

Raising price target on Apple to $325 as a golden era of growth for Cupertino is now on the horizon into 2025. We believe Apple is heading into a multi-year AI driven iPhone upgrade cycle still being underestimated by the Street. The consumer AI Revolution goes thru 🍎 🔥🐂🍎🍏
— Dan Ives (@DivesTech) December 26, 2024

Morgan Stanley reiterated its ‘overweight’ rating, citing AI as a key driver for iPhone upgrades in fiscal 2025.

Barclays maintains an ‘underweight’ rating with the lowest target price of $184 apiece, citing concerns over delayed ChatGPT integration, staggered launches, muted initial enthusiasm, China market challenges, regulatory hurdles, and competition from Huawei’s 5G phones.

The average price target of $286 between Wedbush, Morgan Stanley, and Needham implies a 14.21% upside for the Tim Cook-led company.