Apple Stock Down For 5 Straight Sessions: Retail Turns Positive Despite Analyst’s Skepticism Regarding App Store Revenue Sustainability

Close on the heels of sounding out a warning regarding soft iPhone sales, UBS said Apple, Inc.’s ($AAPL) App Store revenue may be pressured by forex headwinds. A separate Barron’s report said Apple’s stock is overvalued and could face a stiff test in 2025.

UBS, which has a ‘Neutral’ rating and $236 price target for Apple stock, said in a note released over the weekend that its analysis of App Store data suggests a 50 basis-point (bps) currency drag in December, TheFly reported. The firm estimates that global App Store revenue grew 13% year-over-year (YoY) on a reported basis and 13.5% on a forex-neutral basis.

Analysts at the firm said December App Store revenue growth decelerated about 350 bps month over month, but the December comps were unchanged from November.

The firm estimates that in the December quarter, Apple App Store’s reported revenue growth was 15%, but on a forex-neutral basis, the growth may have been a more modest 13.3%.

Demand growth was balanced across geographies, with an estimated 12% growth in the U.S. in December and 13% growth in the rest of the world, UBS said. 

It added that December App Store revenue grew 5% month over month, slightly softer than seasonality due to November’s strength.

UBS also said it remains cautious regarding the sustainability of App Store growth, given the muted iPhone demand.

On Stocktwits, retail sentiment toward Apple stock turned ‘bullish’ (64/100) from ‘neutral’ a day ago, although message volume remained ‘low.’

An Apple watcher on Stocktwits suggested the stock is in a strong support area currently.

Cupertino’s stock rallied 31% in 2024, outperforming S&P 500’s 23% gain, and its forward P/E multiple is currently at 32.68

Apple ended Friday’s session down 0.20% at $243.36, defying the broader market strength. The stock hit an all-time high of $260.10 (intraday) on Dec. 26 and has fallen in all of the next five trading sessions.

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