Apple Inc. stock is trading at record highs, but at least one analyst thinks talk of a â€œsuper cycleâ€ and mounting excitement for the next iPhone are getting out of hand.
Deutsche Bankâ€™s Sherri Scribner raised her 12-month price target on the stock Tuesday morning to $125 from $115 to reflect the recent run-up in shares. However, she maintained a hold rating on Apple
Â stock, and cautioned that expectations for the iPhone 8, expected to have new 3-D technology that could enable augmented reality, may be climbing too high.
While the market continues to price in optimism about a potential â€œsuper cycleâ€ surrounding Appleâ€™s 10th anniversary iPhoneâ€”because of both form-factor upgrades and the record number of older-model iPhones in use that may inspire an abnormally large upgrade cycleâ€”Scribner believes elevated expectations could set up investors for disappointment.
â€œContrary to the market optimism calling the iPhone 8 a super cycle, we caution that it might outsell its predecessors only marginally, due to the high price,â€ she said. â€œWe remain more cautious, given slowing global smartphone growth, elongating refresh cycles and the expected high price of new models.â€
According to media reports citing supply-chain leaks, Apple is expected to unveil three phones in September: two nearly identical phones with screens of different sizes, and one superpremium phone that would be priced above the larger-screen â€œPlusâ€ model with a lionâ€™s share of the new features.
To support her point of view, Scribner pointed to recent supply-chain checks. Total iPhone production is forecast to be 134.5 million in the second-half of 2017, which would represent a 5% year-over-year increase from the same six months in 2016, according to data provided by Deutsche Bank.
While that is an improvement from last yearâ€™s iPhone 7 supply chain shipments, which fell 12%, Scribner said itâ€™s a â€œsignificant deceleration from past yearsâ€ when production increased closer to 20%.
Itâ€™s a â€œfar cry from what many are calling a â€˜super cycle,â€™â€ she said.
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Other analysts remain optimistic, however. Separately on Tuesday, Morgan Stanleyâ€™s Katy Huberty said she thought China, a laggard for Apple in recent quarters, could contribute disproportionately to Apple sales in fiscal-year 2018, which begins with the release of the iPhone 8.
â€œChina users are especially sensitive to new technology and for factor changes,â€ Huberty said.
Shares of Apple gained 0.7% to $136.70 Tuesday, the companyâ€™s fifth record close in the past six sessions. Apple shares have increased 22% in the past three months and 42% in the past year, outperforming the Dow Jones Industrial Average
Â , a 30-member index that includes Apple. The Dow is up 9% in the past three months and 26% in the past year.
Deutsche Bank is one of just 10 brokerages with the equivalent of a hold rating on Apple stock out of 44 tracked by FactSet. The average rating is the equivalent to buy and the average price target is $141.78, according to FactSet.