HSBC said Apple is "facing the reality of market saturation"
Apple Inc. (NASDAQ:AAPL) is one of the worst performers on the Dow in early trading, after HSBC downgraded the FAANG stock to "hold" from "buy," and cut its AAPL price target to $200 from $205. The brokerage firm said the tech titan's "iconic hardware unit growth is broadly over for now," and that it's "facing the reality of market saturation."
This bear note is just the latest in a string of negative analyst attention the Dow stock has received during its recent slide, but about half of the 28 covering brokerages still maintain a "buy" or better rating on AAPL. Plus, the average 12-month price target of $229.82 is a 26.7% premium to current trading levels.
Short sellers, meanwhile, have been ramping up their exposure to Apple stock, with short interest up 14.6% in the most recent reporting period to 41.79 million shares. However, this is accounts for just 0.9% of the security's available float, and is still near historically low levels for AAPL.
The stock has shed nearly 23% since its Oct. 3 record high of $233.47. Part of this downside came amid concern over stalling iPhone demand, with today's Bloomberg report suggesting Apple is reassigning marketing staff and launching aggressive promo deals to increase iPhone sales only exacerbating this uncertainty. And while the shares bounced off their late-November low near $170, they were swiftly rejected yesterday at $185, home to their Nov. 19 pre-bear gap levels. Year-to-date, AAPL stock remains up 7.1%.