Analyst sets Apple (AAPL) stock price after cutting iPhone unit forecast

As the market continues to monitor how Apple’s (NASDAQ: AAPL) iPhone 16 series will impact the company’s stock, an analyst at Citi (NYSE: C) has issued his outlook for the equity after adjusting the smartphone’s sales forecasts.

In particular, Atif Malik reaffirmed a ‘Buy’ rating for Apple (AAPL) stock on October 1, maintaining a price target of $255 despite a revision in iPhone sales forecasts.

Malik lowered his iPhone unit forecast for the September and December quarters, reducing expected shipments by two million units each. As a result, he projects iPhone 16 sales to reach 83 million units by the end of the year.

However, Malik increased his targets for the March and June quarters of 2025 by four million and seven million units, respectively, showing confidence in a mid-term recovery for Apple’s flagship product line.

For the full calendar years of 2024 and 2025, Malik expects iPhone sales to total 224 million and 246 million units, reflecting a 3% decline year-over-year for 2024 but a 9% growth for 2025.

The driving factor behind the lower forecast for 2024 appears to be consumers delaying upgrades as they anticipate the upcoming Apple Intelligence platform, set to launch in the U.S. later in October.

“We believe the overall shorter lead times for the iPhone 16 series are a combination of better supply and, more importantly, consumers likely waiting to see how Apple Intelligence will impact their daily interaction with their phones before upgrading. We adjust our FY24/25/26 estimates by -9%/+1%/0%, respectively, and maintain our Buy rating with a $255 price target,” he said. 

The adjustments have emerged when Apple faces changing consumer dynamics for its latest smartphone series. Notably, Wall Street has been alarmed as demand for the iPhone 16 remains sluggish in the first few weeks of its launch. 

iPhone 16 faces further sales revisions

Separately, Barclays acknowledged that Apple is witnessing weak demand for the iPhone 16 and that the company may have lowered its production orders by almost 3 million units for the December quarter. 

Barclays observed that iPhone unit sales for the September quarter might reach 51 million. To this end, analysts at the institution issued an ‘Underweight’ rating, stating that weaker consumer spending, macroeconomic pressures, and increased competition might impact the stock.

Despite the analyst adjustments, some metrics around the phone have improved. A Finbold report indicated that in the third week, Apple saw the lead times for the phone begin to stabilize.

For instance, JP Morgan(NYSE: JPM) analyst Samik Chatterjee indicated that iPhone 16 base model shipping times in the U.S. stood at 10 days in the third week, compared to 17 days in week two. This development saw Apple outperform the general market during the September 30 session.

Elsewhere, analysts at Evercore ISI retained AAPL’s ‘Outperform’ rating with a price target of $250. According to the firm, the drop in delivery windows for the iPhone 16 and 16 Pro models could boost investor confidence.

In the same breadth, in early September, Goldman Sachs (NYSE: GS) raised the AAPL price target to $276, noting that the company’s investments in hardware and AI will potentially drive revenue growth in 2025 and 2026.

AAPL share price drops amid iPhone sales revisions 

Based on Barclays and Citi’s notable revisions of sales forecasts, AAPL’s share price declined 3.6% in the last 24 hours. As of press time, it was trading at $224. On the weekly chart, the stock is down 1%.

Given the revised forecasts and mixed consumer responses, Apple’s outlook for the iPhone 16 series remains uncertain. While some analysts maintain a positive stance, investor sentiment will likely hinge on the iPhone 16’s performance and the anticipated launch of the Apple Intelligence platform.