Apple’s shares were under pressure in trading Monday (June 12) after Mizuho Securities cut its investment rating on the stock to “neutral” from “buy” over concerns that any benefit from the launch of the iPhone 8 is already baked into the stock.
According to media reports, analysts Abhey Lamba and Parthiv Varadarajan lowered their price target on Apple to $150 from $160 a share, saying in a note to clients: “the stock has meaningfully outperformed on an YTD (year-to-date) basis, and we believe enthusiasm around the coming product cycle is fully captured at current levels, with limited upside to estimates from here on out.”
The analysts still anticipate robust sales of the iPhone 8 but are concerned about its prospects in 2018, partly because they think the growth will be due to its existing base that will replace their older smartphones rather than new customers. There’s also worries about constrains on supply in the early days of the iPhone 8 launch that could put pressure on sales as well as production risks, because the iPhone 8 includes complex features that weren’t in past versions of its flagship mobile device. The analysts also said Apple shares are currently at a level where there is limited room for more upside with the stock trading near the upper end of expectations.
That news out of Mizuho Securities sent Apple’s stock lower in trading and also brought shares of other technology stocks down along with it. It continues a decline from Friday’s trading session amid a lot of growth in tech stocks this year.
Pacific Crest Securities lowered its investment rating to sector weight from neutral on Apple last week also because of concerns about the iPhone 8. Pacific Crest gave Apple a $145 price target, expressing concerns that demand for the upcoming mobile device may not be as strong as thought. Apple typically rolls out a new iPhone in September, but reports have surfaced that it could be delayed until October.