Wed, Dec 20, 2017 - Page 12 News List

Apple given a rare downgrade after more than 50% rise

Bloomberg

Apple Inc’s massive run might be drawing to a close, at least according to one Wall Street firm.

The technology giant got a rare downgrade this morning from Nomura Instinet analyst Jeffrey Kvaal, who said yesterday that iPhone X sales, as well as other positives for the company, are already baked into the stock price.

NEUTRAL

Kyaal lowered the rating to neutral.

“We argue that the stock’s gains for the iPhone X supercycle are in the late innings,” Kvaal wrote.

“We believe unit growth, if not quite Average Selling Price growth, is well anticipated by consensus and a historically full multiple,” he said.

NOT ENOUGH

The boost from services is not enough to lift the stock further at this point and that repatriation might also be priced in, he added.

Apple downgrades have been rare this year. Before yesterday, two cuts to neutral or the equivalent in June were the last, Bloomberg data show.

POSITIVE OUTLOOK

One of those firms has since upgraded the shares.

Analysts are still overwhelmingly positive on the stock, which has been the largest contributor to the S&P 500 Index’s gains this year, with 36 firms rating it a buy, eight advising hold and zero sell recommendations.

CHEAPER OPTIONS

Cowen analyst Karl Ackerman last week said that more customers could be opting for cheaper versions of the iPhone rather than the pricier iPhone X, suggesting that the average selling price could be lower than Wall Street anticipates.

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