Apple stock drops after downgrade at UBS

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UBS downgraded Apple Inc. shares late Tuesday as analyst David Vogt assumed coverage of the company and lowered UBS’s rating to neutral from buy. “[W]hile shares of Apple typically outperform the market in the months leading to an iPhone launch, subsequent to the launch, shares have historically underperformed the market,” Vogt wrote. The stock is trading at 29 times his estimates for earnings per share over the next 12 months, and it trades at 1.5 standard deviations about its trailing one-year mean, he said. “We think Apple shares already reflect the growth from the ‘5G cycle,'” Vogt wrote. He expects services revenue linked to iPhone sales to “materially decelerate” and said that a reacceleration would be crucial to driving upside. Vogt raised his price target on Apple’s stock to $115 from $106 in conjunction with the downgrade. Apple shares are off 0.3% in morning trading Wednesday. They’ve gained 21% over the past three months as the Dow Jones Industrial Average has added about 5%.
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