11:06 AM EDT, 10/25/2024 (MT Newswires) -- Apple's ( AAPL ) iPhone SE is not additive to iPhone sales but could be "cannibalistic", KeyBanc said in a Thursday note following a consumer survey.

KeyBanc said the survey showed that 59% of respondents are interested in upgrading to iPhone 16, but those respondents who are likely or extremely likely to upgrade to the iPhone 16, 61% are interested in the iPhone SE.

"We think this shows the iPhone SE is not incremental, and could possibly be cannibalistic to iPhone 16 sales," the report said. "If iPhone SE is successful, iPhone Units could rise but ASP's could fall, contrary to consensus."

The report also said data points indicated a "slow upgrade path" in the US after earnings from AT&T (T), T-Mobile US (TMUS), and Verizon (VZ).

KeyBanc downgraded Apple ( AAPL ) to underweight from sector weight.

"With Apple ( AAPL ) trading at a large premium to history, vs. peers, and the broader market, we think the stock is likely to underperform and needs to significantly beat expectations to move higher, which we don't expect," KeyBanc said.

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