Bank of America analyst Wamsi Mohan downgraded his rating on Apple Inc. shares AAPL,
to buy neutral from Wednesday, writing that he sees a more balanced risk-reward profile for the stock as it is currently trading at the highest premium versus the S&P 500 SPX,
in a decade. He sees margin risk moving into the 2021 calendar given a higher bill of materials, driving the cost of creating 5G iPhones and the potential for unit volumes to hit if Apple chooses higher selling prices to make up for rising materials. Mohan also sees “difficult comparisons in 2021 due to unsustainable trajectory (30% growth) of high margin App Store growth” and pressure on gross margins for services due to content depreciation charges. He raised his price target for the stock from $ 420 to $ 470 in conjunction with the downgrade. Apple shares are up 0.5% during Wednesday morning trading and they are up 48% in the past three months as the Dow Jones Industrial Average DJIA,
increased by 13%.