JPMorgan analyst Rod Hall issued some cautious comments on Apple (NASDAQ: AAPL), saying that recent rally in Apple shares due to positive reaction on iPhone 7 sales is “premature”.
Apple shares were up 11 percent last week after the T-Mobile and Sprint reported that sales of iPhone 7 and iPhone 7 Plus were strong for the first three days. The shares were up 9 percent this year.
But some analyst warned that the part of strong demand is due to more aggressive-than-expected promotions, it is unsustainable.
“In the case of both AT&T and VZ, our Telco team believes volumes are up a little due to the more aggressive-than-expected promos but not substantially over prior expectations,” Hall wrote in a note to clients Monday.
“At present we believe the increased promos could pull demand into the Sept. Qtr.”
Also, the analyst said Apple didn’t build as much as iPhones to meet the demand. “We note that Apple typically runs shortages at this point in a launch and that this is likely exacerbated by lower initial builds than we saw last year.” Rod said.
Hall reiterated his Apple overweight rating. However, he provided a price target of $107 for the shares. That would represent 7 percent downside from Friday’s close.