Analyst Downgrade Weighs on Apple Stock

Rosenblatt Securities, meanwhile, upgraded the shares

Deputy Editor
Sep 29, 2022 at 10:21 AM
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Apple Inc (NASDAQ:AAPL) is 2.8% lower at last check, trading at $145.71 after BofA Global Research downgraded AAPL to "neutral" from "buy" and cut its target price to $160 from $185, citing weakening consumer spending. This note comes just one day after Apple reported its ditching plans to increase new iPhone production, as inflation hits consumers' wallets.

On the other end, Rosenblatt Securities today upgraded Apple stock to "buy" from "neutral," and hiked its price target to $189. Coming into today, the majority of analysts were optimistic, with 17 rating AAPL a "buy" or better against three "hold" ratings, while the 12-month consensus target price of $183.50 is a 27.6% premium to last current levels. 

Options traders have favored bearish bets of late, per AAPL's 10-day put/call volume ratio of 1.26 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands higher than 100% readings from the past 12 months. Mirroring this sentiment, short-term options traders have rarely been more put-biased than they currently are. This is per Apple stock's Schaeffer's put/call open interest ratio (SOIR) of 1.12, which stands in the 73rd percentile of annual readings.

It's also worth noting that the equity's Schaeffer's Volatility Scorecard (SVS) stands at 97 out of 100. This elevated score indicates AAPL has exceeded options traders' volatility expectations over the past year -- a boon for premium buyers.

On the charts, Apple stock is barely clinging to a positive year-over-year return. Recently, the shares have been pressured by the short-term 20-day moving average. AAPL is sitting at its lowest level in over two months thanks to today's drop, and now stands more than 18% lower in 2022.


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