TLDR
- Jefferies cut Apple to Underperform (Sell) with a new price target of $263.66, down from $285.56
- Supply chain checks suggest Apple cancelled its planned all-glass iPhone due to low production yield
- The scrapped device was expected to launch in September 2027 with a blended retail price of $2,060
- Jefferies lowered its iPhone ASP growth forecast from 9.0% to 6.8% for fiscal 2026-2031
- Apple stock fell around 1.9% on Monday following the downgrade
Apple (AAPL) stock dropped roughly 1.9% on Monday after Jefferies downgraded the stock to Underperform from Hold, cutting its price target to $263.66 from $285.56. That new target implies about 16% downside from Friday’s close and sits among the lowest on Wall Street.
The downgrade centers on one core concern: Jefferies analyst Edison Lee believes Apple has quietly cancelled its planned all-glass iPhone.
The project had been in development since at least 2025 and was expected to debut in September 2027, timed to mark the iPhone’s 20th anniversary. Jefferies estimated that device would have carried a blended retail price of around $2,060.
Apple never publicly confirmed the project, though the company did file a patent for a “six-sided glass enclosure” back in 2019.
According to Lee, supply chain checks now suggest the project was scrapped due to low production yield. Poor yield means too many units are coming off the line with defects, making mass production uneconomical.
Lee called the cancellation “a major setback to efforts to bring in higher-priced iPhones” as memory costs rise. The plan, he says, had been to roll out the all-glass design across future iPhone Pro and Pro Max models to push up average selling prices and margins.
iPhone ASP Outlook Trimmed
With the all-glass model off the table, Jefferies cut its compound annual growth rate estimate for iPhone average selling price from 9.0% to 6.8% for fiscal 2026 through 2031. The firm also trimmed its earnings per share estimates, cutting fiscal 2028 by 2.1% and fiscal 2029 by 3.4%.
Lee now views the foldable iPhone as “the only key driver of higher ASP and margin” going forward. The iPhone 18 Fold is expected to start at $2,199 for the 256GB version, rising to $3,099 for the 2TB model. Jefferies forecasts 14 million unit sales for that device in fiscal 2028.
Apple Intelligence in Focus
The note also took a cautious tone on Apple’s AI roadmap. Lee said the slow rollout of Apple Intelligence makes it harder for Apple to justify putting more memory into its phones.
Jefferies’ supply chain checks show Apple plans to raise DRAM in the iPhone 19 Pro Max to 16GB from 12GB, but only for that model. If memory prices rise more than expected in fiscal 2027, Lee warned, Apple could drop that upgrade entirely. Each additional 4GB of DRAM adds an estimated $60-70 to the bill of materials.
The analyst also weighed in on recent trade-in value changes that sparked speculation about iPhone 17 price hikes. While Apple raised trade-in values for iPhone 15 and 16 in some markets, it cut trade-in prices for iPhone 16 Pro and Pro Max in China by 5% and 2% respectively.
Heading into Monday, Apple stock had gained more than 15% in 2026. That run had already taken a hit last month when fiscal third-quarter earnings triggered a selloff that wiped out $359 billion in market cap.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
