NEW YORK (AP) — Jefferies & Co. cut its price target for Apple on Friday, saying that higher pricing and lower production rates will slow iPhone sales.
Peter Misek, who has a "Hold" rating on the stock, lowered his price target by $25, to $425.
Misek said that while Apple is trying to carve out more market share with a lower-priced iPhone, the new, cheaper iPhone 5C introduced last week costs almost as much as previous iPhone models.
The 5C will start at $99 for a 16-gigabyte model with a two-year wireless contract. Without a contract, the 5C will cost $549. The iPhone 5S, which was also introduced last week, will start at $199 with a new wireless contract, comparable to past iPhones.
Already, a number of industry watchers have questioned whether the cheaper version of the iPhone will make the splash that Apple had intended in emerging markets.
And Misek said that checks with suppliers suggest that Apple is already cutting back production of the phones, partially as a result of supply issues related to the new finger print sensor included in the 5S.
Shares of Apple Inc. edged down $2.68 to $470.01 in premarket trading.
cut his price target for Apple Inc. shares, saying that he now thinks iPhone sales will be lower than he previously expected as a result of higher-than-expected pricing and lower-than-expected production rates.