Apple shares were downgraded to 'reduce' by HSBC.
Apple shares were downgraded to"reduce" by HSBC on concern its pivot into services will have lower margins and the new offerings including its streaming TV product will fall short of expectations.
div > div.group > p:first-child"> Apple shares fell 1% in premarket trading Wednesday following the call to $197.50. The firm's $180 price target represents an additional 9% downside from here. "Recent announcements on services has Apple putting money where its mouth is but returns could take some time to extract," wrote analyst Erwan Rambourg in a note to clients Wednesday."While the new offerings may garner consumer attention, we do not expect these services to move the needle significantly. We believe Apple has come too late to the game and its offering, by and large do not differ much or are below par to offerings from competition.
The analyst also noted that the services business is likely to be less successful at gaining and keeping customers in emerging markets than it is in the U.S."Cash generation and a probable beat next quarter after a China-related warning early in the year will have some investors think the current valuation of Apple is reasonable," stated the not.
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