Maxim's Nehal Chokshi downgraded Apple's stock from Hold to Sell with a $190 price target.
The case for turning bearish on Apple's stock is based on expectations for revenue in the the March-ending quarter to fall 14% short of consensus estimates. For the full fiscal year 2020, total revenue is likely to miss estimates by 6%.
Operating profit for the full year 2020 is also expected to fall as growth in services and wearable won't offset declining iPhone sales. Maxim thinks the growth in wearable, home and accessories will decelerate the following year from tougher competition.
On the other hand, the research firm said growth of 5G communication will benefit Apple. Specifically, Chokshi said a 5G iPhone launch in September 2020 will lift iPhone revenue by 4% (through September 2021) versus down 5% year-over-year in fiscal 2020 and fiscal 2022.
However, Apple's current P/E multiple at 20 times consensus 2020 estimates represents a five-year peak and is "unjustified."
Shares of Apple were trading lower by 0.5% at $263.