Bank of America revamps Apple price target

Apple (AAPL) stock has lost about 7% year to date, at the time of writing, Monday afternoon, March 23, according to Yahoo Finance. Meanwhile, the SPDR S&P 500 index (SPY) is down about 3.82% in the same period.

The stock is lagging behind the S&P 500, which isn’t doing great either, and is not much of a surprise. Investors still expect an AI turnaround from Apple.

Apple's earnings report on January 29 provided a decent boost to the stock. Read the article “Apple stock price swing with $143B record” by TheStreet’s Aparajita Chatterjee for a recap of Apple’s Q1 report.

Unfortunately, all the gains from that report have been wiped out. The stock took a significant hit on February 12, dropping 5% due to reports of Siri delays and regulatory scrutiny of the company’s news app, as reported by CNBC.

Bloomberg recently reported that the foldable iPhone will launch this fall.

Bank of America analyst Wamsi Mohan and his team updated their opinion on Apple shares after consulting with their supply chain sources regarding the foldable iPhone launch.

Bank of America lowers Apple price target

Mohan wrote: “Our checks in Asia suggest that Apple will likely introduce its first foldable iPhone in 2026.”

He said that he expects the device to have an inner screen of 7.7" to 7.8" and under 10mm thickness when folded. The team believes that the initial demand for the device will be strong, and the supply chain is gearing up for a range of outcomes from 10 million to 20 million units.

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Analysts noted that this is a much higher number of units than competing products. They said their supply chain sources indicate that Apple will launch the foldable and the Pro models (Pro/Pro Max) in the usual September time frame.

Related: Who owns Apple? Institutional holdings & executives’ shares

Mohan said that the base model, Air, and the “e” models are expected to launch in the first half of 2027.He noted that this delayed launch creates a shift in units from the September and December to the March quarter and changes the seasonality, which is not yet reflected in the consensus. This will create a push out for fiscal year 2026, which will cause lower units and revenues.

Analysts changed their EPS estimates for 2026, 2027, and 2028 to $8.36, $9.53, and $10.64 from $8.51, $9.77, and $10.86, respectively.

In a research note shared with me, Mohan reiterated a buy rating for Apple stock and lowered the price target to $320 from $325, due to the “staggered” launch of base, Air, and “e” models and associated gross margin changes, based on a 32 multiple of his estimates for EPS in 2027 of $9.94.

Analysts noted downside risks for Apple:

• Weaker iPhone cycle on consumer spending risk,
• Weaker near-term services trajectory,
• Gross profit dollars declining YoY next few quarters,
• iPads/Macs reverting to pre-COVID levels,
• Stronger dollar,
• Antitrust lawsuit,
• Potential trade conflicts, tariffs.

Apple's upside is:

• Stronger sales of Pro iPhone models,
• Potential new products (AR/VR) and services,
• Stronger than expected iPhone cycle,
• Tailwinds from lower memory costs,
• Faster than expected recovery in emerging markets.

MacBook Neo has already sold out

Apple launched MacBook Neo, a cheap laptop with a price tag of just $599, on March 4. It didn't take long for the laptop to become a hit.

Apple CEO Tim Cookposted on X on March 20:

“Mac just had its best launch week ever for first-time Mac customers. We love seeing the enthusiasm!”

It was certainly a great launch. 9to5Mac reported that as of March 20, all eight MacBook Neo models are sold out online until next month.

When MacBook Neo was announced, I wrote an in-depth analysis of the importance of that launch in my article “Apple’s latest product is a game-changer,” and I am not surprised that it is sold out.

What surprised me was that there were almost no reactions from the analysts. The exception is Rosenblatt, which reiterated a Neutral rating for Apple stock and raised its price target to $268 from $267, as reported by Investing.

I believe the weak analyst reaction is due to the expectation that gross margin on the MacBook Neo will be very low. But the purpose of that laptop is to get millions of new customers into the Apple ecosystem, and it will be successful in doing that. This means more revenue from various Apple services.

Related: History of Apple: Company timeline and facts