Raymond James reiterated its Outperform rating and $250 price target on Apple (NASDAQ:AAPL), but warned that looming reciprocal tariffs could significantly impact the tech giant’s earnings in 2025.
With more than 90% of Apple’s hardware produced overseas—primarily in China and India—the company could face steep import duties under the proposed U.S. tariff policy. Chinese-manufactured products may be subject to a combined 54% tariff, while Indian-sourced items could see 26%, creating a substantial cost burden.
Given that the Americas accounted for 43% of Apple’s fiscal 2024 revenue and U.S. sales represent about a quarter of its total, the potential hit to earnings could be severe. Analysts estimate that, assuming no exemptions and tariffs go into effect on January 1, Apple’s 2025 earnings per share could take a 25% hit unless countermeasures are implemented.
While Apple’s growing manufacturing diversification outside China may offer some buffer, raising U.S. product prices by approximately 30% appears to be the most direct way to offset the tariff-related margin squeeze. However, such a move carries the risk of dampening domestic demand, and could even spark retaliatory trade responses from other nations, further pressuring Apple’s global performance.
Raymond James is holding its forecasts steady for now, awaiting clarity on the scope and duration of the tariffs, as well as Apple’s strategic response to the challenge.