Analysts See Trouble Ahead of Apple’s Market Shares

This year, stocks of Apple has received major gains. However, some traders are cautious of run continuing.

Apple shares have increased a little more than 50 percent so far in 2017, placing the stock on track for its best annual performance since 2010. During that year, the company has added $284.7 billion in market cap.

Some portfolio managers and strategists are concerned that the stock has run too far, in a very short period of time.

The senior portfolio manager at Gradient Investments, Mike Binger, said: “It’s a great company; tough time to step into the stock today.

“Apple’s on an epic run right now. It’s up 50 percent this year. But Apple has a very distinct pattern, and it overlaps with their iPhone rollouts. The market is expecting a strong iPhone 8 and iPhone X, especially, and I think they’re going to get it, Binger said Tuesday in a ” Trading Nation ” segment on ” Power Lunch .”

Binger noted that the earnings of the company have reflected growth for 2017 and for 2018. However, he said that he believes that they will “stall out” two years from now.

Binger said: “I think at that point, you’ll get a pullback in the stock.”

The risk-reward for the stock is quite unattractive at this point, said Larry McDonald, founder of the Bear Traps Report investment newsletter.

Around one year ago, Wall Street analysts placed their price target on Apple at $130 per share, McDonald said, and the stock is now trading about 34 percent above those levels. The overwhelming bullish view on the stock is one concerning factor to McDonald.

Indeed, no analysts listed on FactSet give the stock a “sell” rating. The consensus is mostly “buy” ratings, with several “hold” ratings and three “overweight” ratings.

“Apple’s the type of stock you want to wait for a dislocation. Every couple of years, one comes about, and buy into fear. You want to sell into complacency. And that’s what you want to do today,” he said Tuesday on “Trading Nation.”

The stock was trading modestly higher on Wednesday.