NEW YORK (TheStreet) -- Shares of Apple Inc (AAPL - Get Report) were slumping, down 4.97% to $124.25 in early market trading Wednesday, after the iPhone maker was downgraded by analysts at Cowen this morning.
The firm cut its rating to "market perform" from "outperform" with a lower price target of $130 from $140 following the iPhone maker's latest quarterly earnings results.
Cowen analysts noted that June quarter iPhone units were weaker than forecast even after adjusting for channel inventory.
The firm added that Apple is entering a transition period, and the stock's risk/reward no longer supports its "buy" rating.
On the other hand, analysts at Piper Jaffray recommends buying the stock on the selloff.
For the third quarter, Apple earned $1.85 a share, higher compared to analysts' estimates of $1.81 a share.
Revenue came in at $49.6 billion for the quarter, compared to analysts' estimates of $49.81 billion.
Apple also said it sold 47.5 million iPhones, 10.9 million iPads, and 4.8 million Macs during the quarter. Analysts were expecting the company to sell 48.8 million iPhones, 10.9 million iPads, and 4.9 million Macs.
Insight from TheStreet's Research Team:
Brian Sozzi commented on Apple in a recent post on RealMoney.com. Here is a snippet of what Sozzi had to say about the stock:
As expected ahead of the report, it was the great unknown on how the Apple Watch performed from the start of the quarter to end of the quarter. Given Apple's overly cautious guidance for the September quarter, one could surmise that the company has seen a serious slowdown in Apple Watch sales.
Granted, sales are likely to pick up as Apple makes the Watch more available around the world. But it's the core demand in markets that the Watch is already available that has some on Wall Street worried.
And in light of what appears to be sluggish demand for the latest and greatest from Apple, there is fear the next iteration sometime in 2016 will not garner significant enthusiasm.
Keep in mind that Apple is valued based on consumers being enthused by every single thing the tech giant releases, and displaying a crazy desire to upgrade no matter the replacement cost.
Want more information like this from Brian Sozzi and TheStreet Research Team BEFORE your stock moves? Learn more about RealMoney.com now.
Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: AAPL Ratings Report