The market's anticipation of big sales from Apple’s (NASDAQ: AAPL) new iPhones drove its shares higher this year, but now one Wall Street firm says demand for its smartphones will be slightly worse than it expected.
UBS said its recent survey of consumers pointed to weaker demand for the iPhone, but any financial downside will partly be offset by higher pricing.
"We present results from our semi-annual UBS Evidence Lab Smartphone survey of 6,700 smartphone buyers across five countries. Buying intentions are flattish from a year ago," analyst Steven Milunovich wrote in a note to clients Sunday
"We interpret the results as a signal that Apple has maintained its position around the world but unit growth could be more muted than originally expected… We think growth will likely slow in the U.S. and Europe given more muted purchase intent."
As a result, Milunovich lowered his 2018 iPhone unit sales growth forecast to 10% from 12%. He also reduced his Apple fiscal 2018 earnings per share estimate to $11.50 from $11.65.
The analyst reaffirmed his buy rating and his $190 price target for Apple shares, representing 9% upside to Friday's close.
Apple is one of the market's best-performing large-cap stocks, rallying 51% this year through Friday versus the S&P 500's 16% gain.
Apple shares opened Monday after a long weekend down 47 cents to $174.50, within a 52-week trading range of $108.25 to $176.24.
