Apple (NASDAQ:AAPL) shares are trading 1% lower in pre-market Monday after Loop Capital analysts downgraded the stock to Hold from Buy. The analysts’ price target implies an upside potential of less than 3% based on Friday’s close.
The analysts cite macro headwinds that are hurting iPhone demand, leading to a reduction in Apple’s June quarter builds and shipments by about 10%. This is in addition to the reduced guidance Apple provided on May 4th. Loop Capital Supply Chain analysts expect iPhone shipments to be down 5 million to 35M.
While the demand may be weakening, the analysts mention that “stronger than appreciated iPhone ASPs can counterbalance softening units.” Apple stock closed at $175.16 on Friday. Investors should monitor the situation closely as the risk of further reductions in Apple’s guidance has increased.