Cowen's Arcuri Argues Apple (AAPL) Stock Not a 'Sell' on CNBC
NEW YORK (TheStreet) -- Cowen's Timothy Arcuri responded to BGC Partners "sell" rating on Apple (AAPL) - Get Report stock with a more optimistic outlook on CNBC's "Power Lunch" on Monday.
BGC downgraded the tech giant's stock to "sell" from "hold" earlier today on the expectation that the iPhone 7, to be released in September, will not sell as well as many investors have predicted.
"Look, I think that the upgrade rate for the iPhone 7 is going to be the lowest of any model before. (That estimate) is not new," Arcuri stated. However, he points to a growing install base as the reason.
"The install base today is 13% bigger than it was last year so even if you had flat units, or down a bit, year over year, the upgrade rate will be a lot lower than it was last year because the base is just that much bigger," Arcuri explained.
Arcuri also pointed out that many iPhone users have older versions of the phone and will be forced to upgrade soon.
"There are people sitting there with phones two years or older. There's this big bubble of folks that bought the iPhone 6. A lot of the battery life on those phones is now going into decline," Arcuri said.
The iPhone 7 is going to "both" sell better than expectations and profit from a "super cycle" the following year when the next generation iPhone is launched, Arcuri estimated.
Shares of Apple are slipping 1.75% to $96.93 late this afternoon.
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Separately, TheStreet Ratings rated Apple as a "buy" with a score of B.
The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. TheStreet Ratings feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: AAPL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.