Nomura now has a $175 price target on the company, down from its previous view of $180. The firm also lowered its 2019 EPS estimate for the tech giant to $11.39 a share from $11.50 a share.
"Apple could eat the tariffs (we estimate 15-20% EPS impact on its own), pass to US consumers (~4% impact), and squeeze suppliers (less room here than before). Trade tension hurt China iPhone demand this winter; we would assume the same would apply again," analyst Jeffrey Kvaal wrote.
Analysts polled by FactSet were expecting Apple to report earnings of $11.49 per share.
In addition to concerns about trade tensions, Nomura also was bearish on the smartphone upgrade cycle that has been weak in recent quarters.
"Upgrade rates at Verizon and AT&T imply a 5-6 year replacement cycle, up from ~3 years in 2012. This includes only upgrades to new phones. Structural drivers of the increase are 1) EIP plans that have lifted consumer visibility into device costs 2) higher ASP phones have made users more likely to protect/repair them and 3) software upgrades have extended iPhone lifecycles," Kvaal wrote.
Apple shares were down 1.5% to $187.29.
Apple is a holding in Jim Cramer's Action Alerts PLUS charitable trust.