New York: Apple Inc received a rare bear call on Thursday, after the company was downgraded to sell from hold at Maxim Group, which cited the potential for lower iPhone revenue over the next year.

Analyst Nehal Chokshi forecast weakness in both unit sales and average selling prices, citing an analysis of a proprietary survey.

The survey data “lead us to expect 14 per cent below consensus iPhone revenue in F2Q20 & 6 per cent below for FY20,” the firm wrote to clients. It expects iPhone revenue will fall 5 per cent in Apple’s fiscal 2020, and also anticipates that Apple’s operating profits will fall 2 per cent year-over-year “as ongoing growth in services and wearables will only partially offset iPhone declines.”

Maxim established a $190 price target on the stock, which implies downside of nearly 30 per cent from Apple’s Wednesday record close of $264.47. Shares of Apple have climbed more than 50 per cent from a June low. The stock was down 0.6 per cent in pre-market trading.

Sell ratings on Apple are somewhat rare, although the ranks of bears has been growing this year. According to data compiled by Bloomberg, Maxim is the sixth firm to recommend selling the stock, compared with the 27 firms with a buy rating and the 15 with a hold-equivalent view. The average price target on Apple shares is $256, or about 3 per cent below its Wednesday close.

The cautious view about the iPhone is also something of an anomaly on Wall Street. Earlier this week, Hon Hai Precision Industry Co. — the assembler for most iPhones and iPads — reported earnings that beat expectations, in what was seen as a proxy for solid iPhone 11 demand. Apple’s recent results also pointed to strong demand, and there is a good deal of optimism for 2020, when the Cupertino, California-based company is expected to release a 5G version of the product. Last week, BofA wrote that Apple shares still had “significant room for upside,” given the potential of the next product cycle.

According to a Bloomberg MODL estimate, Apple is expected to ship 190.1 million iPhones over its 2020 fiscal year, with an average selling price of $750.71. In 2019, nearly 55 per cent of Apple’s total revenue was derived from the iPhone, per data compiled by Bloomberg.