Apple’s valuation is starting to look expensive, and investors should steer clear, according to Needham. The investment firm downgraded the iPhone maker and “Magnificent Seven” stock to hold from buy. Analyst Laura Martin also removed her $225 price target — which implied upside of 10.7%. “We move to the sidelines for AAPL owing to its expensive relative valuation, increasing fundamental growth headwinds, and rising competitive threats,” she wrote. “We believe that, for AAPL shares to work, they must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months. Until then, we believe that $170-$180/share is a better entry level for AAPL shares.” Apple closed Tuesday’s session at $203.27. Martin noted that Apple’s forward multiple of 26 times earnings is high relative to its big tech peers despite the company’s slower growth and roughly 50% above its 10-year average. AAPL YTD mountain AAPL YTD chart Shares of Apple have tumbled 19% this year. They fell slightly in the premarket following the downgrade.
