Mizuho Securities Analyst: Apple Watch Is Going To Have Hard Time Filling In The Gap That iPhones Are Going To Leave

Apple Inc. AAPL is continuing the bull run it started post its fourth-quarter results declaration, surpassing the $750 billion market-cap mark today. However, according to Abhey Lamba, analyst at Mizuho Securities USA, a lot of good news regarding sales of the iPhone and the Apple Watch are already ‘baked’ into the price.

Lamba was on CNBC Monday to talk about how the high expectations build around the Apple Watch are going to affect the stock in the near future.  

High Expectations For The Watch

“We think expectations for Apple Watch are a little bit high and there could be source of disappointment over there,” Lamba said. “And if you look at the stock price currently, we think a lot of that good news is baked into the price over here and its closer to the scenario analysis that we highlighted in the note that’s around $130 to $140 is where we think it could go, but a lot of the good news is already baked in, we remain Neutral on the stock, we think our price target of $115 is more reasonable as we look down 12 months.”

Won’t The Apple Watch Help Increase The iPhone Sales?

“Listen, I mean if you look at it iPhone , the stock historically has traded how [well] the iPhone performance has been,” Lamba replied. “If iPhones are accelerating we see the stock perform really well, iPhone shipments are decelerating we see the stock performance not do so well and from 75 million units that we saw in December quarter, we think they are going to decelerate especially more meaningfully after the March quarter and Apple Watch is probably going to have a hard time filling in the gap that iPhones are going to leave.”

“ We think it’s going to do well, but it’s probably not going to be big enough to kind of offset the gap that iPhones are going to leave and that’s where we feel going into the back half of the year there are going to be headwinds on the stock.”