Wall Street analyst downgrades Apple and says it has ‘peaked’

NEW YORK — With Apple's earnings report just a day away, Wall Street analysts are more at odds than ever, and one of them in particular anticipates tough times for the tech giant.

“Our opinion (is) that Apple has peaked under the leadership of CEO Tim Cook,” Mr Colin Gillis of BGC Financial said in a note this week. “Our view that that there is risk that the upgrade rate for the next iPhone may slow even more than the upgrade rate cycle of 6s, which has been materially lower than the upgrade rate of the iPhone 6 as per the company.”

Mr Gillis went on to downgrade the stock to “sell” and lower his price target by 23 per cent to US$85 (S$115.70). Apple is currently trading around $97.34. Mr Steven Milunovich, an analyst covering Apple at UBS Group AG, also sent out a pessimistic note, telling readers that his research shows buying interest for smartphones in North America is the lowest since the financial crisis. He has a US$115 price target on the shares.

However, others disagree and say that while things haven’t been great as of late, things will get better next year. “Amid pervasive investor fear and negativity, we see results/guidance as not great but good enough to start swinging the tide from near-term fear to cautious optimism about the future,” Mr Timothy Arcuri of Cowen and Company said in a note. “Given our installed base work, we see a “super-cycle” in ‘17 and iPhone 7 could even sell a little better than bearish expectations.”

Even Mr Gillis acknowledges that shares could see a move higher after earnings due to the low expectations. After that bounce, though, his pessimism continues.”(W)hen we ask ourselves ‘Do we see Apple gaining or losing its next $100 billion of value’, the answer is losing.” BLOOMBERG