Apple(US:AAPL) Benzinga·2025-04-10 20:34Core Viewpoint - Jefferies analyst Edison Lee upgraded Apple Inc from Underperform to Hold, lowering the price target from $202.33 to $167.88, citing potential exemption from U.S. tariffs due to a $500 billion investment commitment in the U.S. over the next four years, while also noting risks from a rising global recession impacting iPhone demand [1] iPhone Shipment and Revenue Forecasts - iPhone shipment forecasts were reduced by 3.6% for fiscal 2025, 7.7% for fiscal 2026, and 5.5% for fiscal 2027, leading to revenue cuts of 2% for fiscal 2025, 4.1% for fiscal 2026, and 3.5% for fiscal 2027 [2] Pricing Strategy and EPS Projections - A $50 price increase for iPhone 18 in 2026 (excluding the base model) and a $100 increase for iPhone 19 in 2027 (all models) were included, driven by higher hardware costs, with EPS projections for fiscal 2025, 2026, and 2027 now below consensus by 2.5%, 8.5%, and 3.4% respectively [3] AI Challenges in Smartphones - Two main challenges for AI in smartphones were identified: a lack of fast DRAM and advanced packaging solutions, limiting AI model size, and limited access to app data, affecting understanding of user habits [4][5] AI Revenue Forecast Adjustments - AI revenue forecasts for fiscal 2028 were cut, using only the installed base of iPhone 19 and lower penetration rates, resulting in EPS forecast reductions of 18% to 19% for fiscal 2028 to fiscal 2031 [6] Valuation and Tariff Impact - Even with a potential exemption from U.S. tariffs, Apple's valuation at 2.2 times fiscal 2025 PEG is considered high; if tariffs are imposed, EPS impacts for fiscal 2025 and 2026 could be 14% and 12%, respectively, with DCF dropping to $150, and under a 104% tariff scenario, EPS impacts could rise to 26% and 21%, with DCF falling to $126 [7] Current Stock Performance - Apple stock was reported down 5.83% to $187.25 as of the latest check [8]