Despite what several analysts are saying, Wells Fargo Securities continues to remain “neutral” on Apple’s market performance, forecasting that shares will trend lower in the face of high expectations. Analyst Maynard Um raised his “valuation range” on AAPL stock to between $100 and $110, below the company’s $112.40 trading price as of last closing price. Although his estimates were revised higher, he sees Apple shares dropping to what he claims is the “high sentiment bar.” He wrote the following in a note to his investors:

Apple is coming up on tougher compares and, in particular, we are cautious on the lack of new large carrier additions in the December quarter, which has had at least one new large carrier addition in the past.
The analyst claims he believes Apple will have to “materially beat” market expectations in order to move gain stock value. Um’s forecasts call for Apple to sell 67 million iPhones in the just-concluded December quarter with a gross margin of 39.6%. He also expressed concern over Apple’s next line of products, especially the 16 GB models of the iPhone and iPad which he claims isn’t sufficient space for modern devices. According to him, raising the minimum storage to 32 GB could positively affect the average selling prices and therefore margins.

The analyst’s research note should be taken with a grain of salt though considering that Wells Fargo and Um originally downgraded AAPL stock to its “market perform” rating in January of 2014. Since then, Apple has grown more than $30 from a pre-split price of $79.02. Um’s concerns about Apple and his expectations make him one of the few analysts that stand out given that many other investors and analysts have generally had positive expectations from Apple.

We’ll find out how true his expectations turned out to be once Apple reports its fiscal 2015 first-quarter earnings.

Source: Wells Fargo via AppleInsider