Investing.com – Apple (NASDAQ:AAPL) fell on Thursday after one Wall Street analyst suggested the stock may be running too hot, slapping a sell rating on the tech giant on expectations that sales of its latest slate of iPhones will come up short.
Maxim Group downgraded its rating on Apple to sell from hold, with a price target of $190. Apple (NASDAQ:AAPL) fell about 0.5% to around $263.
Citing analysis of a propriety survey, Maxim said it expects iPhone revenue to come in 14% below consensus in fiscal second quarter of 2020 and 6% below for the full year, with overall iPhone revenue down 5% for the year.
Against the backdrop of falling iPhone sales, some have suggested that the company's higher-margin services business would plug the gap.
But Maxim disagrees, forecasting that Apple’s operating profits will fall 2% year over year as ongoing growth in services and wearables will only partially offset iPhone declines.
In its most recent quarter, however, Apple (NASDAQ:AAPL) has shown there is life beyond the iPhone.
Wearables and services helped drive revenue up 1.8% in the September quarter, offsetting a 9.2% decline in iPhone sales.
Still, many on Wall Street are betting the tech giant will revive iPhone sales with the launch of a 5G-enabled smartphone touted for late next year.
Bloomberg reported recently that Apple (NASDAQ:AAPL) expects iPhone sales to return to growth next year after the launch of 5G-enabled phones. The iPhone maker plans to ship 200 million phones in 2020, the report said.