Apple (NASDAQ:AAPL) shares fell 1.20% to $227.20 in premarket trading after Jefferies downgraded the stock to "underperform" from "hold" and significantly lowered its price target to $200.75 from $211.84.
This makes Jefferies one of only four brokerages with a "sell" equivalent rating among the 47 analysts covering the stock, according to LSEG data.
The downgrade comes amid concerns about weakening iPhone sales and increased competition from Chinese smartphone manufacturers like Xiaomi.
Data from the International Data Corporation (IDC) reveals that global smartphone shipments for both Apple and Samsung declined in the December quarter.
Jefferies, referencing IDC data, suggests that the sales weakness in both the iPhone and the broader consumer electronics market is more pronounced than initially anticipated.
Jefferies analysts predict that Apple will likely miss its 5% revenue growth target for the first quarter of fiscal year 2025 and forecasts low single-digit revenue growth for the second quarter.
The brokerage also expressed skepticism about the potential for artificial intelligence (AI) to drive a significant upgrade cycle in the near future.
Meanwhile, Apple's stock has already declined approximately 8.2% this year as of its last close, reflecting investor concerns about the company's growth prospects in a challenging market.