Another day, another price-target cut for Apple (AAPL) stock.
BMO Capital Markets analyst Tim Long lowered his price target on Apple stock to 116 from 118, but reiterated his outperform rating ahead of the company's fiscal third-quarter report, scheduled for after the close Tuesday.
Apple fell 0.6% to 99.40 on the stock market today. Intraday it climbed as high as 101. It's the fourth straight session that Apple has been turned back from the 100 level.
IBD'S TAKE: Apple shares were down 5% year to date through Wednesday. The stock has an IBD Relative Strength Rating of 20, meaning it has been outperformed by 80% of stocks in the last 12 months. For more data on Apple stock, check out the IBD Stock Checkup.
In a research note Wednesday, Long lowered his earnings estimates for Apple for fiscal years 2016 and 2017, based on his expectation of declining gross margins.
"For the September quarter, we now estimate corporate gross margin of 37.5% vs. consensus 38.3%," Long said. "We believe the dilution from the iPhone SE was more pronounced in June, and September will be more driven by initial volume and gross margin on the iPhone 7."
Long predicts that Apple management will guide to gross profit margin of 37%-38%, which is below consensus but expected by many investors.
On Tuesday, Wells Fargo Securities analyst Maynard Um lowered his valuation range on Apple stock to 115 to 125, down from 120 to 130, but maintained his outperform rating.
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