As a sell-off in technology shares, focused in mega-cap names including Apple (AAPL), Alphabet (GOOG), Facebook (FB), Microsoft (MSFT), and Amazon (AMZN), continues from Friday into Monday, Mizuho analyst Abhey Lamba downgraded Apple citing fully priced in “enthusiasm” for the company’s iPhone launch while Piper Jaffray analyst Michael Olson raised his price target on Amazon saying the company is well-positioned for the next five-plus years.

BACKGROUND: Shares of several mega-cap technology companies declined on Friday, driving the Nasdaq down nearly 2.5%, and leaving it with a weekly loss, while the Dow managed a small gain and the S&P was fractionally lower on a weekly basis. Apple fell nearly 4%, or $6.01, to $148.98 by close on Friday while Amazon was down $31.96, or 3%, to $978.31. The sell-off continued globally on Monday.

“LIMITED UPSIDE”: On Sunday, Mizuho analyst Abhey Lamba downgraded Apple to Neutral from Buy and lowered his price target for the shares to $150 from $160 saying “enthusiasm” around the upcoming iPhone launch is fully priced in after the stock’s year-to-date outperformance. Lamba also said he is cautious on FY18 consensus numbers due to “potential pull-in of demand,” growth driven by replacements versus net new customers, initial supply constraints, possible increased average selling prices for stock-keeping units and gross margins risks. The analyst sees limited upside to consensus estimates and notes Apple shares are trading near the upper-end of their recent valuation range. Lamba’s views echo those of Pacific Crest analyst Andy Hargreaves, who downgraded Apple to Sector Weight from Overweight on June 4, saying upside from the launch of iPhone 8 is already reflected in the shares. An “extremely strong iPhone 8 cycle” is being priced into the stock while little weight is being given to gross margin risks, supply issues, or the likelihood for declines beyond the iPhone 8, Hargreaves said.

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