Apple Stock Malaise Wears Out Analyst While Others Stay Hopeful

With Apple stock stuck in a downtrend, at least one analyst has given up on it. Meanwhile, others remain upbeat about prospects for the consumer electronics giant.

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On Friday, New Street Research analyst Pierre Ferragu downgraded Apple stock to sell from neutral. In a note to clients, he said Apple (AAPL) could see a significant decline in iPhone sales ahead. Ferragu called the recent strong sales of the iPhone 12 series unsustainable.

The iPhone 12 handsets sparked a supercycle of upgrades because they were the first 5G-enabled iPhones. However, this year’s models, due out in September, could disappoint, he said.

“The next iPhone lineup is likely a ’12S’ type with limited innovation,” Ferragu said. He also predicted that people will spend less on consumer electronics as the economy reopens following the Covid-19 pandemic.

Ferragu cut his price target on Apple to 90 from 135. On the stock market today, Apple fell 0.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 124.61.

Morgan Stanley Maintains Buy Rating On Apple Stock

Still, many Wall Street analysts remain positive on Apple.

Morgan Stanley analyst Katy Huberty reiterated her overweight, or buy, rating on Apple on Friday. She has a 161 price target on the shares.

Data points are positive for June-quarter sales of iPhone and iPad as well as the App Store, she said in her note to clients.

“We are increasingly bullish on Apple’s June-quarter earnings, especially in light of the stock’s recent underperformance, which we believe is unwarranted,” Huberty said.

Also Friday, Evercore ISI analyst Amit Daryanani maintained his outperform rating on Apple with a price target of 175.

Heavy Institutional Selling Of Shares

Apple stock has been in the doldrums since its blowout March-quarter earnings report. While Apple posted much better-than-expected sales and earnings for its fiscal second quarter, investors focused on its cautious guidance for the June quarter.

Apple stock has been in decline since it hit a record high of 145.09 on Jan. 25. Its relative strength line has been sliding over the past four months as Apple stock underperforms the S&P 500.

Apple stock has an IBD Relative Strength Rating of 47 out of 99. That puts it in the lower half of stocks for performance over the past 12 months. Apple stock also is trading below its 50-day moving average line, a negative sign.

Plus, it has a worst-possible IBD Accumulation/Distribution rating of E, indicating heavy institutional selling of shares.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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