Concerns over the iPhone's prospects have led to increased bearish sentiment on Wall Street: six institutions have issued sell signals for Apple Inc. (AAPL.US), marking the highest number since 2012.

Wall Street's pessimism towards Apple Inc. (AAPL.US) is accelerating. Jefferies has recently downgraded Apple Inc. stock to a "underperform" rating, bringing the total number of institutions with a sell-equivalent rating to six, tying the highest record since 2012, reflecting deep-seated market concerns about the growth prospects of the iPhone. Jefferies analyst Edison Lee pointed out in a research report that supply chain investigations show Apple Inc. has canceled the all-glass iPhone model for its 20th anniversary due to poor production yield. He believes this signals that Apple Inc. faces greater challenges than expected in raising the average selling price (ASP) of the iPhone through new form factors. Jefferies has also lowered Apple Inc.'s target price from $285.56 to $263.66, while the stock closed at $313.33 last Friday. Apple Inc.'s stock price had already dropped 1.2% in pre-market trading on Monday, representing an approximate 8% decline from its recent peak. This round of decline was directly triggered by the company's weak sales guidance provided in last quarter's earnings reportciting component shortages, Apple Inc. issued a disappointing outlook. Path to Raising iPhone ASP Blocked, Foldable Screen May Become a Niche Product The core logic behind Jefferies' downgrade points to a bottleneck in Apple Inc.'s long-standing growth model that relies on product form upgrades to drive ASP and gross margin growth. Edison Lee wrote in the report that the cancellation of the 20th anniversary all-glass iPhone due to inadequate production yields indicates that driving ASP upward with new form factor iPhones is "more difficult than expected." In this context, the upcoming foldable iPhone expected to be released next month "will be the only key DRIVE for raising ASP and profit margins in the coming years." However, Edison Lee is also cautious about this "only DRIVE." He noted that the sharp rise in costs of core components such as memory chips would force the pricing of the foldable iPhone to be extremely high, "we still believe such an expensive phone will be a niche product," making it difficult to bear the responsibility of driving overall performance. Expansion of the Sell Camp, Analyst Consensus Rating Drops to Lowest Level Since 2019 Jefferies' downgrade is the latest example of the recent wave of short-selling Apple Inc. on Wall Street. According to Bloomberg's compiled data, there are currently six institutions rating Apple Inc. equivalent to "sell," matching the historical high level in 2012. Last month, KeyBanc Capital Markets was the first to downgrade Apple Inc. to "underweight," citing concerns about demand prospects and valuation levels. From a more macro analyst perspective, Apple Inc.'s comprehensive recommendation score (a composite indicator of buy, hold, and sell rating ratios) currently stands at only 3.88 (out of a maximum of 5), the lowest level since 2019. The proportion of analysts recommending a buy has fallen below 60%, a stark contrast compared to other tech giants in the same categoryMicrosoft Corporation, Amazon.com, Inc., and NVIDIA Corporation all have over 90% of analysts recommending a buy. In terms of stock price, Apple Inc.'s closing price last Friday was $313.33, down about 8% from its recent high, and further declined by 1.3% in pre-market trading on Monday. As the group of sell ratings continues to expand and the logic of ASP growth comes under scrutiny, Apple Inc.'s relative attractiveness among institutional investors is facing a systemic test. This article is reproduced from "Wall Street View," author: Zhang Yaqi; GMTEight editor: Chen Siyu.