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Yet another Wall Street analyst firm has downgraded Apple’s stock, as sales expectations for the iPhone are set to disappoint this year.
According to CNBC, Atlantic Equities has become the second analyst company to lower its rating for Apple shares. It made the decision on Monday, downgrading shares to neutral from overweight.
The company believes that the tech giant will have a disappointing 2018 in terms of iPhone sales. Longbow Research made a similar action last week.
James Cordwell, an analyst at Atlantic, said he’s seeing “signs that iPhone demand is starting to soften, limited visibility into the potential for future iPhone cycles and emerging challenges to the smartphone’s dominance at the centre of consumer technology.”
In a client note, he said declining sales will have a negative impact on stock. Cordwell wrote: “We believe the stock’s multiple will compress, limiting upside potential.
He added that data points from the supply chain recently “turned negative.” Cordwell explained: “Tougher ASP comps and the lack of a volume ‘supercycle’ with the iPhone X will leave it difficult to build conviction in future cycles.”
“Meanwhile, there also appears potential that concerns could increase over Apple’s position at the centre of consumer technology, particularly given the growing consumer interest and rapid innovation in voice-based devices.”
Last week, Longbow Research lowered Apple’s stock amid fears that iPhone sales may begin to slip. Analysts at the firm predict that Apple will sell less iPhones in the 2018 financial year.
Shawn Harrison, who works at Longbow, unveiled these claims in a briefing. Harrison said his firm is “seeing only a good, not great iPhone cycle”.
He wrote: Apple found iPhone price elasticity with the introduction of the X blunting some demand. Reception of the iPhone 8/8Plus was lukewarm with Apple shifting production back toward the iPhone 7 as a result.”
He expects Apple to ship 233 million handsets this year, as opposed to the previous estimate of 238 million. Other analysts predict that the firm will ship 239 million iPhones in 2018.