Apple shares are unlikely to outperform in the second half of the year as high valuations and rising risks in China take the shine off next week’s highly anticipated product launch, according to JPMorgan Chase & Co.
Analysts led by Samik Chatterjee cut their price target for the world’s largest company to $230 per share from $235 in a note published Friday, saying China’s restrictions on iPhone use come as competition is heating up in Apple’s largest foreign market.
“The restrictions will make it difficult for Apple to continue generating share gains in the local market,” they wrote in the note.
Still, they say China’s plan to extend a ban on iPhone use by government and state-owned company employees probably won’t have a significant impact on sales because previous restrictions didn’t affect consumer behavior much.
Apple shares rose 1 percent on Friday after a two-day decline that wiped out nearly $200 billion in market value.
“We see the latest news feed on China and the launch of the Huawei Mate 60 as headline risk for the stock,” said analysts led by Atif Malik.
Apple’s stock performance for the rest of the year now depends on next week’s iPhone 15 launch, JPMorgan said. But analysts said any rise in shares would be capped by the 38 percent rise so far this year, even as investors became more optimistic about iPhone sales following the event.