Apple Downgrade Hits iPhone Pricing Thesis
Apple downgrade by Jefferies cites canceled all-glass iPhone and rising memory costs, trimming its price target and clouding iPhone ASP and margin outlook.
KEY TAKEAWAYS
- Jefferies downgraded Apple to Underperform and cut its price target to $263.66.
- Supply-chain checks found the planned all-glass iPhone was canceled for low production yields.
- Jefferies trimmed FY2028 EPS 2.1% and FY2029 EPS 3.4%, clouding iPhone ASP and margins.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Jefferies analyst Edison Lee downgraded Apple Inc. (AAPL) to Underperform on Aug. 10, 2026, after supply-chain checks indicated the company canceled a planned all-glass iPhone due to low production yields. The downgrade prompted Jefferies to cut its price target and trim earnings per share (EPS) estimates, clouding the outlook for iPhone average selling price (ASP) and margins.
Jefferies Downgrade Rationale
Jefferies cited rising memory costs as a key pressure point, making it harder for Apple to offset margin compression through higher iPhone prices. The firm described the cancellation of the all-glass design as a major setback for efforts to sell higher-priced iPhones and improve ASP and margins. The supply-chain checks suggested the all-glass iPhone was scrapped because of poor production yields, undermining a planned product upgrade.
Financial and Product Impact
Jefferies cut its price target to $263.66 from $285.56 and lowered EPS estimates by 2.1% for fiscal 2028 and 3.4% for fiscal 2029. The canceled model was reportedly intended for Apple’s 20th-anniversary iPhone, expected around September 2027. With that design off the table, Jefferies now views the foldable iPhone as the primary remaining driver of ASP and margin growth. These revisions reflect a more bearish outlook on Apple’s ability to sustain iPhone ASP momentum without a significant new hardware form factor.
