Apple gets rare sell rating as analyst warns about iPhone trends

Ryan Vlastelica for Bloomberg:

Apple Inc. received a rare bear call on Thursday, after the company was downgraded to sell from hold at Maxim Group, which cited the potential for lower iPhone revenue over the next year.

Analyst Nehal Chokshi forecast weakness in both unit sales and average selling prices, citing an analysis of a proprietary survey.

MacDailyNews Take: Who? From where?

Maxim established a $190 price target on the stock, which implies downside of nearly 30% from Apple’s Wednesday record close of $264.47.

Earlier this week, Hon Hai Precision Industry Co. — the assembler for most iPhones and iPads — reported earnings that beat expectations, in what was seen as a proxy for solid iPhone 11 demand. Apple’s recent results also pointed to strong demand, and there is a good deal of optimism for 2020, when the Cupertino, California-based company is expected to release a 5G version of the product. Last week, BofA wrote that Apple shares still had “significant room for upside,” given the potential of the next product cycle.

MacDailyNews Take: Last we heard from Noname Group’s Joe Blow… er, Maxim Group’s Nehal Chokshi, was back in May 2018 when he claimed that the optimism over Apple’s services opportunity was overblown and he predicted Apple’s subscription businesses would disappoint investors.

We iCal’ed it.

However, in Apple’s fiscal 2018 third quarter ended June 30, 2018, the company reported revenue of $53.3 billion, an increase of 17% YOY, and quarterly earnings per diluted share of $2.34, up 40% YOY. Apple posted services revenue of $9.548 billion, an increase of 31% YOY. It was, at that time, Apple’s best June quarter in history.