NEW YORK (TheStreet) - Apple (AAPL - Get Report) is gearing up for its next iPhone release, widely expected to be unveiled at a Sept. 9 event, which has helped spur renewed interest in Apple from an investor and consumer perspective.
Apple shares are up 24% year to date, but were trading down on Wednesday by 3.5% to $99.70 following a research note from Pacific Crest Securities saying to sell shares ahead of the event.
As chatter picked up about the iPhone with several sell-side analysts publishing notes on what to expect from Apple, Samsung held a triple-city simultaneous event in New York, Berlin and Beijing on Wednesday to release two new so-called phablets - the Galaxy Note Edge and the Galaxy Note 4 as well as the Gear VR headset, using technology from Facebook's (FB) Oculus Rift.Here's what analysts are saying on Wednesday about Apple: Read More: How Samsung Is Trying to Take the Press From Apple Andy Hargreaves, Pacific Crest Securities (Outperform; $100 PT) We recommend taking profits in AAPL. Unless next week's event details massive incremental profit opportunities, we are likely to downgrade AAPL's rating. We expect Apple to gain material share and see a higher rate of early upgrades through the iPhone 6 product cycle. However, we believe sales to new iPhone users will decline beyond the iPhone 6, which is likely to drive iPhone unit sales down in F2016. Anticipation of this is likely to drive multiple compression through F2015 as the iPhone 6 cycle progresses. Even if we stretch our estimates for F2015 iPhone units, the likelihood for multiple compression over that time suggests the majority of potential upside from iPhone 6 is priced into the shares. AAPL trades at 6.5x our F2015 EBITDA estimate of $70.0 billion and at 6.0x a bullish F2015 EBITDA scenario that includes an extra 15 million iPhone sales and 15 million iWatch sales. This leaves limited room for upside to the stock, in our view, unless Apple launches new products that can generate billions of dollars of incremental operating profit. We will be looking for this type of potential at the Sept. 9 event, but are likely to downgrade AAPL if we do not see it. Read More: Apple's Next iPhone: What We Think We Know