Apple's stock price target slashed amid Siri upgrade delays and tariffs

In the United States, Morgan Stanley has reassessed its outlook for Apple, stating that recent developments could hinder the company's growth prospects for its stock. On March 12, 2025, the firm announced a reduction in its price target for Apple shares, lowering it from $275 to $252. This adjustment indicates a forecasted upside of 14.1% from the stock's closing price prior to the announcement. The downgrade comes as Apple has faced difficulties in the current year, with shares down nearly 12%, a notably poorer performance than the 5% decline of the S&P 500 index during the same period. Analysts at Morgan Stanley, led by Erik Woodring, have revised their projections for Apple's iPhone shipments, reducing the anticipated numbers due to a delay in a Siri upgrade that includes essential artificial intelligence features. For 2025, the estimate is set at 230 million iPhones, unchanged from the previous year, with a slight increase anticipated for 2026. This stagnation suggests a challenging environment for improving iPhone upgrade rates in the future. Additionally, market pressures from U.S. tariffs imposed on Chinese goods have further complicated Apple's earnings outlook. The reduced shipment forecast is compounded by an anticipated $2 billion increase in product input costs, causing expected earnings and revenue to drop by 5% to 6% for the fiscal year 2026. While Apple is reportedly taking steps to mitigate these impacts, without substantial tariff exemptions, it is unlikely the company can offset the full cost. Despite the challenges highlighted by these adjustments, a majority of Wall Street analysts maintain favorable ratings for Apple. Of the 46 total analysts covering the company, 31 hold a strong buy or buy rating, signaling confidence in its long-term potential. The average price target among these analysts aligns closely with Morgan Stanley's revision, revealing an overall optimistic investment sentiment, as it implies a solid potential for future upside in Apple's stock value. Following this announcement, Apple shares experienced a slight decline in premarket trading.