Apple's stock fell Wednesday after KeyBanc recommended investors stop buying, as U.S. iPhone sales are likely to struggle.
Shares of Apple Inc. slumped Wednesday, after KeyBanc’s Brandon Nispel recommended investors stop buying, saying valuations are at near record levels and U.S. iPhone sales are likely to struggle.
Nispel cut his rating on the technology behemoth to sector weight, after being at overweight for at least two years. In addition, Nispel said he expects sales from U.S. carriers to be soft, as U.S. upgrade rates are trending toward all-time lows. The post-paid growth environment is also slowing and iPhone promotions are being weighted toward higher-priced plans.
“In our view, user growth is still more important than unit growth, but we believe this could be a losing argument [near-term] given lack of catalyst, which we believe results in a neutral risk/reward,” Nispel wrote.Nispel also said Apple’s stock is trading at near all-time high multiples of enterprise value versus operating profitability and free cash flow, and is being valued at a “large premium” to the Nasdaq compared with history.
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