BTIG Research analyst Walter Piecyk has downgraded Apple stocks to neutral from buy, the San Francisco Chronicle reports.
While talk the technology bellwether shares could jump from around $635 to around $1,000 and value the company at around $1 trillion has repeatedly grabbed headlines, Piecyk feels wireless carriers have had enough helping sell the carrier's popular iPhone.
Apple will see a strong second quarter, with revenue around $40 billion versus current estimates of $36 billion.
Then the news gets sour.
Wireless carriers such as AT&T will push back subsidizing the iPhone.
Subsidizing the product in hopes of boosting sales and on anticipation for increased usage among more users maybe hurting margins.
If those subsidies wane, sales drop and the company's third quarter will disappoint.
"We also do not expect a material broadening of market launches for the product like what was seen in the first calendar quarter," Piecyk concludes, the Chronicle reports.
"Specifically, we expect Apple's iPhone sales to drop to 27.5 million units in Fiscal Q3 resulting in a revenue estimate that is $1 billion below consensus."
Apple's last downgrade came in October of last year from BGC Partner’s Colin Gillis.
“With over 50 analysts covering Apple, our approach has been to conduct a demand based analysis based on an examination of trends at wireless operators,” Gillis wrote, according to CNBC.
“Our analysis falls short in its lack of supply chain data points often provided by component suppliers and manufacturers.”
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