Apple Analysts Are Sounding a Historically Rare Note of Caution

(Bloomberg) -- The herd of Apple Inc. bulls is getting thin.

As it struggles with signs of lower demand for its iPhones, an issue that has pushed Apple into a bear market and threatened its status as the largest company by stock market value, the ranks of Wall Street analysts advocating the stock has been shrinking.

According to Bloomberg data that goes back to 2010, there are currently 26 firms with a buy rating on Apple, a number that matches a multi-year low hit earlier this year. At the same time, the number of hold ratings has been growing, and currently stands at a record 20. To compare, 37 analysts rated Apple a buy a year ago, while just 8 put it as a hold.

Among recent downgrades, HSBC on Monday cut Apple to hold, saying it was “too late to sell” the stock following an 18 percent plunge in November, but that it was also “too early to buy” it.

The current number of buy ratings matches the number seen for a brief stretch in September. Prior to that, 26 stood as the fewest number of buy ratings since 2010, according to the data.

The growing caution comes as investors fret over the prospects for Apple’s iPhone, by far its most important product line. A number of iPhone suppliers have recently cut their forecasts, while Apple itself said it would stop providing unit sales for iPhones, iPads, and Macs in fiscal 2019, which analysts said raised the specter of a “sustained” downturn.

Still in all, only two analysts actually recommend selling Apple, and the average price target on the stock is $225, which represents upside potential of more than 27 percent from current levels.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper, Sebastian Silva

©2018 Bloomberg L.P.