Apple downgraded for a second time after its earnings — shares down 9.2% since report 

Key Points
  • Apple draws a second downgrade from Wall Street in the wake of its quarterly earnings report on Thursday.
  • Investors were disappointed with Apple's guidance and phone sales as well as its decision to omit iPhone unit sales figures in future financial reports.
  • Apple posted its fifth consecutive week of stock-price losses on Friday for the first time since 2012. The stock is down 9.2 percent since it reported earnings.
  • The latest downgrade is from Rosenblatt Securities. Bank of American Merrill Lynch also downgraded Apple on Friday.
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Apple's stock was downgraded for a second time since its earnings report, this time by Rosenblatt Securities, which said it has lowered its expectations for iPhone production and shipments.

The firm cut its rating on the largest public company in the U.S. to neutral from buy, telling clients that it will be difficult for 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 in Friday's note. We "downgrade to neutral."

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

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

Apple's stock fell 2.8 percent Monday to $201.59 per share following the second downgrade. The stock is down 9.2 percent since the company reported earnings last week.

Apple posted revenue and earnings per share numbers that surpassed Wall Street's expectations for the fourth fiscal quarter. Still, Rosenblatt's Zhang held his price target steady at $200, implying 3.6 percent downside.

"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 said. "The iPhone Max has been selling well and will most likely help increase average selling price and gross margin, but we believe it will be difficult for ASP to grow in the second half of calendar-2019."

The Rosenblatt downgrade echoes that issued by Bank of America, with analyst Wamsi Mohan advising clients that slower growth in app store revenue, soft December-quarter guidance and weaker emerging market trends all expected to drag on the stock.

The analyst also lowered his 12-month price target to $220 from $235.

— CNBC's Michael Bloom and Gina Francolla contributed reporting.

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