New Street Research downgraded Apple shares on Friday morning, saying its big run-up so far this year has been unwarranted. 

"We downgrade the stock to Sell, with a $170 target price, reflecting normalized multiple," wrote New Street's team of analysts lead by Pierre Ferragu. The $170 price target is above 15% below the stock's current level; shares have risen 27% so far this year. The stock was up slightly to $199.97 on Friday morning.

"Positive sentiment on services and potentially good numbers on that front could save the day, but don't create a material upside risk on today's valuation," New Street said.

New Street also thinks Wall Street is too optimistic on the rate at which iPhone holders will upgrade to new phones. Apple has focused on services as its long-term growth driver, but iPhone sales still account for the majority of Apple's revenue.

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The analysts are giving Apple a forward multiple of 15, based on consensus earnings estimates and the current share price. By contrast, Morgan Stanley, one of Apple's biggest bulls with a price target of $220, assigns Apple a forward earnings multiple of 19 times the bank's 2019 earnings per share estimates for Apple, largely predicated on services growth, which New Street sees as a segment without such clear upside. 

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