Apple’s stock drops on analyst downgrade and bleak iPhone outlook

Apple Inc.’s (NYSE: AAPL) shares were down by 2.1% in midday trade on Monday after Rosenblatt Securities downgraded the stock from Neutral to Sell on grounds that there was less reward in owning the stock. The firm maintained its price target of $150 per share.

Analyst Jun Zhang said in a note to clients that although
the firm didn’t consider Apple’s stock as a short, it believes the company will
face fundamental deterioration over the next 6-12 months. The firm believes new
iPhone sales will be disappointing and that iPad sales growth will slow in the
second half of 2019 while other product sales growth may not be meaningful to
support total revenue growth.

Apple has been facing concerns over the lack of innovation
in its iPhones and the company recently saw the departure of its chief design
officer Sir Jony Ive. Apple has
been losing revenue to Samsung and other players due to its failure in
updating its flagship product. The company is also facing tough competition
from Chinese companies like Huawei and Xiaomi, who constantly update their
products with the latest technologies.  

Last month, a report revealed that Huawei and Xiaomi were performing better than Apple and Samsung in the European market and appear to be slowing snatching market share away from the iPhone-maker and the Korean smartphone giant.

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