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Apple Stock Extends Slide As BofA Lowers Rating, Cuts Price Target On iPhone Demand Concern

"We see risk to (Apple stock) outperformance over the next year ... driven by weaker consumer demand," said BofA Global Research analyst Wamsi Mohan.

Updated at 10:02 am EST

Apple Inc.  (AAPL) - Get Free Report shares extended declines Thursday after analysts at Bank of America lowered their rating and price target on the world's most-valuable tech company, citing fading consumer demand and a weak reception for the new iPhone 14. 

BofA Global Research analyst Wamsi Mohan loped $25 from his Apple price target, lowering it to $160 per share, while cutting his rating on the stock 'neutral', as he anticipated "material negative estimate revisions" for its near-term profits. 

Mohan noted what he called a "weaker iPhone 14 cycle", set against elevated risks to global consumer spending, decelerating gains in services revenues, a return to pre-COVID demand levels for iPads and Macs, and headwinds from the surging U.S. dollar. 

"Apple shares have outperformed significantly this year and have been perceived as a relative safe haven," Mohan said in client note. "However, we see risk to this outperformance over the next year ... driven by weaker consumer demand."

Apple shares were marked 4% lower in early Thursday trading to change hands at $143.83 each, extending their one-month decline to around 10.9%. 

Earlier this week, Bloomberg reported that Apple has instructed suppliers and assemblers to pare back plans to boost production of the newly-launched iPhone 14 by as many as 6 million units, opting instead to chase a target of 90 million -- roughly in-line with last year's tally and its early summer forecast -- for the second half of this year.

That followed a cautious outlook from its main assembler, Foxonn, which has forecast current-quarter smartphone revenues coming in flat to last year, citing "geopolitics, inflationary pressure and the Covid pandemic.

Apple declined to provide detailed September quarter revenue guidance following its better-than-expected third quarter earnings in late July, but said overall revenue growth would likely outpace gains over the three months ending in June.

Apple said solid China demand, as well as a muted supply chain hit, helped iPhone revenues rise 2.8% from last year to $40.67 billion over the June quarter, just ahead of the $40.5 billion Street forecast.

Overall, Apple earned more than $19.44 billion for its fiscal third quarter, as revenues rose 2% from last year to $82.96 billion, just ahead of analysts' estimates of $82.88 billion.