Apple's Stock Slips After Societe Generale Downgrade

Shares of Apple Inc. slipped 0.3% in premarket trade Wednesday, after Societe Generale downgraded the technology giant, citing concerns over smartphone selling prices and the negative effects of currency movements. Analyst Andy Perkins cut his rating to hold, after being at buy for the last 10 months, but kept his stock price target at $130, which is 3.2% above Tuesday's closing price or $126.01. He estimates that average selling prices of iPhones declined to $651 each during the March quarter from $687 in the December quarter, as the number of iPhone 6 and iPhone 6 Plus models declined as a percentage of total units sold. Perkins also said his breakdown of handset sales by country implies a 5% currency headwind given the U.S. dollar's strength during the quarter. Regarding the Apple Watch, Perkins expects sales to represent just 1.7% of total sales for fiscal 2015, compared with 63% for handsets, so he wrote in a note to clients that "investors' focus should remain firmly on handsets, at least for now." The stock has run up 14% year to date, while the S&P 500 has gained 0.9%.

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