Apple shares drop 3% on analyst downgrade; iWatch and mobile payments cited

Apple stockholders have enjoyed a recent run up in the shares to a new all-time high (taking into account the 7 for 1 stock split that took place earlier this year). But those riding the stock higher, have run into a little hiccup after an analyst downgraded the stock on Wednesday. Pacific Crest analyst Andy Hargreaves is recommending that Apple stockholders sell their shares.

What has turned Hargreaves bearish on the tech titan is the speculation that Apple will enter the mobile payments arena with the Apple iPhone 6, and the strong possibility that Apple will soon unveil a wearable product. The analyst believes that mobile payments and the long-rumored Apple iWatch will not add enough pop to the bottom line.  For a company the size of Apple, the profits generated by entering the mobile payments business, and from selling a wearable device, are "not meaningful" in the "near to medium term."

Pacific Crest still has Apple rated "Outperform," with Hargreaves expecting the Apple iPhone 6 to prop up the stock. In fact, despite telling clients to take profits in the stock, he also suggests that investors hold on to some Apple shares, at least through the September 9th event at which the iPhone 6 and the wearable device are both expected to be unveiled.


Not all of Wall Street is down on Apple. On Tuesday, Piper Jaffray's Gene Munster raised his target on the stock to $120. Apple is currently trading at $99.10, down over 3% on the day.

source: BusinessInsider