Will Apple (NASDAQ:AAPL) stock start selling for peanuts? While that doomsday scenario is still nowhere close to coming true, one analyst has taken a contrarian view by lowering his rating of the highly successful company’s stock. BTIG’s Walter Piecyk cut his ratings for Apple from Buy to Neutral, citing changing dynamics in the wireless industry.
“We believe that investors should take a breather during the expected strength of this quarter and the rapid rise in the stock,” Piecyk writes.
While Piecyk believes Apple’s upcoming fiscal second-quarter earnings will again be a “blow-out” performance, pegging earnings at $10.75 per share on revenue of $40 billion, he worries about the strength of the wireless industry and a related fall in iPhone sales further down the road.
Piecyk says he expects subsidies that currently support post-paid iPhone purchases to fall, since Apple’s big price tag was turning out to be too expensive for carriers AT&T (NYSE:T), Verizon (NYSE:VZ), and Sprint (NYSE:S).
“We expect those policies to change as the faster upgrade rate of smartphones compared to legacy feature phones has been a costly surprise to post-paid and pre-paid operators, alike,” he writes. “In the United States, we expect iPhone sales to decline 4 million sequentially to 9 million with the largest impact coming from AT&T, Apple’s largest customer.”
While Piecyk insists he is not an “Apple hater,” he adds that the prospect of the company not launching a “revolutionary product into the market” this year may also be a huge factor and disappoint consumers, thus hurting the stock further.
Apple shares were down $8.68, or 1.4 percent, at $625 in early trading on Monday. The company’s stock has grown nearly 565 percent over the last five years.