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Apple's Stock Price Dips Ahead of WWDC as Analyst Issues Rare Downgrade

<img src="(http://cdn.macrumors.com/article-new/2015/02/Apple-Logo.png)" alt="" width="200" height="200" class="alignright size-full wp-image-437787" />Apple shares are trading around 1 percent lower today, just ahead of WWDC 2017, after one analyst issued a rare downgrade of the stock.

"We are downgrading AAPL to Sector Weight and recommend investors reduce position sizes," said Andy Hargreaves, equity research analyst at Pacific Crest Securities, in a note to clients. "We believe AAPL anticipates strong performance in the iPhone 8 cycle, while providing relatively little weight to risks through the cycle or the potential for iPhone sales to decline in fiscal 2019."

Wall Street remains largely upbeat about Apple's stock (https://www.macrumors.com/2017/05/05/apple-stock-bounces-back/) heading into the second half of this year, as investors anticipate the so-called "iPhone 8" to be a hit among customers, but Hargreaves believes the stock has limited upside, as he said hype surrounding the hotly-anticipated device appears to be "priced in."





Hargreaves anticipates the upside of the iPhone 8 to be offset by key risks, including the "potential for gross margin pressure, diminishing value of the mobile operating system, and the likelihood for declines in iPhone unit sales beyond the iPhone 8 cycle due to market saturation and elongating."





Hargreaves also believes iPhone sales will likely resume declining in 2019, as the iPhone 8 will result in above-average sales in 2018 that are unlikely to be matched once Apple returns to a normalized upgrade rate, similar to what happened after pent-up demand for the larger-screened iPhone 6 started to fade.





AAPL was trading at $153.85 at the time of publication, after opening at $154.34, but remains only slightly off its all-time high.

<div class="linkback">Related Roundup: WWDC 2017 (https://www.macrumors.com/roundup/wwdc/)
Tags: AAPL (https://www.macrumors.com/roundup/aapl/), Pacific Crest Securities (https://www.macrumors.com/roundup/pacific-crest-securities/), Andy Hargreaves (https://www.macrumors.com/roundup/andy-hargreaves/) </div>
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Source: Apple's Stock Price Dips Ahead of WWDC as Analyst Issues Rare Downgrade (https://www.macrumors.com/2017/06/05/apple-stock-dips-ahead-of-wwdc/)