NEW YORK (TheStreet) -- Shares of Apple (AAPL) have been retreating since Donald Trump was elected president last Tuesday, because investors are concerned about a trade war with China, BGC Financial analyst Colin Gillis said on CNBC's "Power Lunch" on Monday afternoon. The firm has a "sell" rating and $85 price target on the stock.
People are scared that "Apple is going to suffer and that it will suffer more so than some of the other multi-national tech companies," he said.
Apple trades at the lowest P/E multiple of companies with a $200 billion or higher market cap because it's a "one-product company," Gillis explained. The company relies on its iPhone too much and lacks innovation so it doesn't "deserve" to trade at a premium.
A trade war would mean Apple's products would become more expensive in the U.S., which is its biggest market.
But an even bigger concern than a trade war is domestic competitors in China that will limit Apple's growth there, Gillis claimed. "The number one item to drive Apple to my price target of $85 is the rise of the domestic Chinese producers."
Instead of Apple, investors should buy shares of Alphabet (GOOGL) because it has multiple products that allow for new revenue streams, he advised.
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Separately, 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.
TheStreet Ratings team rates Apple as a Buy with a ratings score of B+. This is driven by a few notable strengths, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.
You can view the full analysis from the report here: AAPLAAPL data by YCharts