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 (NASDAQ:MXIM) 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 (NASDAQ:MXIM) 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 (NASDAQ:MXIM) 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.