Apple downgraded for a second time in two days on weaker iPhone sales expectations

Apple's stock was downgraded for a second time in two tradings in light of softer expectations for iPhone production and shipments.

Rosenblatt Securities cut its rating on the largest public company in the U.S. to neutral from buy, telling clients that it will be difficult for the Cupertino, California-based Apple to offset weaker volume with higher selling prices in the second half of 2019.

"Calendar fourth-quarter guidance reflects our cautious view on weaker than expected sell-through and production reductions for iPhone XS/XR," analyst Jun Zhang wrote. We "downgrade to neutral."

Apple was downgraded by Bank of America Merrill Lynch on Friday.

Apple — which posted its fifth consecutive week of losses for the first time since 2012 on Friday — finished the day down 6.6 percent, its worst one-day move since January 2014. The company Thursday evening reported iPhone sales that missed estimates, gave disappointing revenue guidance and said it would no longer report iPhone unit sales.

Rosenblatt's Zhang held his price target steady at $200, implying 3.6 percent downside. Apple's stock fell 1.6 percent in premarket trading following the second downgrade.

"We believe Apple's slightly soft guidance reflects our recent view that Apple will reduce iPhone production (our estimates of a 6-million-unit production cut)," Zhang added. "The iPhone Max has been selling well and will most likely help increase ASP and gross margin, but we believe it will be difficult for ASP to grow in the second half of calendar-2019."

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