Apple Shares Downgraded At Wells Fargo

(RTTNews) - Ratings agency Wells Fargo has downgraded shares of consumer electronics giant Apple (AAPL), citing concerns that gross margins will come under pressure with the anticipated release of iPhone 6.

Wells Fargo analyst Maynard Um lowered his rating on the company's shares from "Outperform" to "Market Perform," but decided to keep Apple's shares in the same $536-to-$581 range.

The stock is down 1 percent at $553.61 in mid-afternoon trading on the Nasdaq.

Street Inside website posted a series of quotes from Um's note on Apple.

"Our bullish thesis on Apple had been predicated on the expectation for gross margin (GM) expansion driven by the 5s cycle. While we still have conviction in the gross margin thesis (and the potential for iPad/iPhone unit upside), we believe this may be largely embedded into the valuation," Um writes.

"Gross margins have decreased by an average of 225 basis points (bps) in the period following the launch of new form factor iPhones while increasing ~225bps in the two quarters following an "s" launch. With the secular story, in our opinion, largely over, we believe the stock may be more susceptible to trend with margins."