Wall Street is turning sour on Apple.
According to FactSet, analysts have the lowest percentage of buy ratings on Apple's stock in nearly 15 years, signaling a bearish shift on the company's prospects not seen since the year it released the first-ever iPod Nano.
With Apple shares closing on Friday about $5 away from its average price target of $178.13 and still about 30 percent off its 52-week high, where the stock goes next seems to be an open question. Apple shares rose nearly 2 percent in Monday's premarket after a Bank of America upgrade to buy from neutral. It said the recent pullback in the stock "presents opportunity."
"I think it's basically a repricing of the stock away from a sexy tech stock to, essentially, a stodgy, dodgy, blue-chip-with-a-dividend stock, simply because the growth story in Apple has really petered out," Boris Schlossberg, managing director of FX strategy at BK Asset Management, said Friday on CNBC's "Trading Nation."
"It's by no means a sour apple," Schlossberg continued. "But it's just [that] the growth prospects here are quite limited, simply because the whole story or the narrative that they're moving into services, I think, is very problematic."
Schlossberg pointed out that roughly 40 percent of Apple's services revenue comes from one source, Google search, and that Apple's history might be capping its potential.
"I think Apple, at its core, culturally, is very much a hardware company. They need a huge hardware hit — that's what they haven't had. Until they have one, the growth story's going to be very limited," he said. "They do have one interesting possibility with the Watch as a medical device, but that seems to be still a very embryonic market. And I think that's the key thing: The market is just not excited about anything new on Apple."
Piper Jaffray analyst Craig Johnson had more faith in the iPhone maker's stock, flagging some bullish trends bubbling up in its long-term chart.
"When I look at the charts here on Apple, you can see that [the] stock's had a nice downtrend reversal. You're up about 19 percent off the lows. You're still 25 percent off the highs, and the Street is kind of split: 22 buys, 22 holds and one sell on the stock," Johnson said on "Trading Nation." "I think this stock can continue to move higher, and I think from a technical perspective, we can come back and retest that 200-day moving average, which is about $189, $190 at this point in time."
The technical analyst added that while the Street's fundamental analysts see some more upside for the stock, he wouldn't focus too much on the lower percentage of buy ratings as it relates to the Apple's potential.
"I think there's more room for this stock, ultimately, to work, and I wouldn't be too concerned about the place marker that the analysts have out there at this point in time, given some of the concerns and changes in the business model they've got," he said. "I think it's just been a resetting of expectations, but I think the longer-term picture for Apple is still quite positive."
Disclosure: Piper Jaffray makes a market in Apple.
