Jefferies Upgrades Apple to Hold on China-Driven iPhone Growth

Jefferies has upgraded Apple Inc. (AAPL) from Underperform to Hold, citing robust iPhone sales and a recovery in the Chinese market as key drivers. The firm raised its price target to around $188, projecting revenue growth of approximately 8% and earnings per share growth near 10% for the fiscal third quarter of 2025, exceeding consensus estimates and Apple's own guidance. Despite the positive outlook, Jefferies warns of potential headwinds including a possible slowdown in iPhone unit growth later in the year and downside risks to Apple's services revenue. Apple’s iPhone sales surged by 15% year-over-year in April and May, fueled by tariff-driven pull-in demand and effective discount strategies, contributing to a raised iPhone volume forecast by 4% for 2025 to 2027. Wall Street analysts remain optimistic, with an average price target near $231, implying about an 11% upside, and an overall consensus rating of 'Outperform.' Nonetheless, uncertainties such as high Android inventories in the smartphone market and global economic factors continue to pose challenges to growth projections.