An analyst sees muted near-term prospects for Apple, Inc.
What Happened: KeyBanc analyst Brandon Nispel maintains a "Sector Weight" rating on Apple.
KeyBanc's "First Look Data" shows a 6% month-over-month increase in indexed Apple hardware spending in February, exceeding the typical 14% decline. The analyst attributes this improvement to the February launch of the Vision Pro and a weaker February in the previous year.
Year-to-date hardware spending is down 20% compared to last year, but this is an improvement from the 8% decline in the first quarter, as per the analyst.
Historically, Apple's second-quarter hardware sales have declined 24% sequentially for the past three years. This is lower than analyst estimates of a 30.5% drop and KeyBanc's own estimate of 31.3%.
Dragging Factors: KeyBanc maintains its lower hardware revenue forecast due to weak upgrade rates and Chinese competition. App Store regulations add uncertainty, and the analyst expects limited stock price movement.
"App Store regulation is likely an overhang, and conviction in a growth inflection is low," Nispel said.
A separate KeyBanc note suggests iPhone 15 sales are meeting expectations, with healthy demand for Pro models and stable sales for base models. However, supply remains limited. KFLD data, however, indicates softening iPhone demand overall, with February sales down 8% month-over-month and 12% year-over-year.
Price Action: Apple ended Friday's session down 0.22% at $172.62, according to Benzinga Pro data. The stock is down 10.7% this year, while the S&P 500 has clocked a 7.3% gain.
