Investors should sell Apple shares because fewer customers than expected will upgrade to the upcoming iPhone 7 and because of the tech giant's lack of success in launching new products away from smartphones, according to broker BGC, which lowered its rating to sell from hold.
"Our opinion is that Apple has peaked under the leadership of CEO Tim Cook," BGC's Colin Gillis wrote in a note to clients Monday.
Gillis is disappointed with Apple's current management team that had five years to build new product categories during "the maturation of the smartphone market" and only launched the lackluster Apple Watch in that time frame.
As a result of his concerns about Apple's near-term fundamentals, Gillis lowered his fiscal 2017 earnings per share estimate to $8.24 from $9.74, which is now lower than the $8.96 Wall Street consensus.
Apple, which is expected to release the new iPhone in September, is scheduled to report quarterly results Tuesday after the bell.
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