Tomahawk, WI 08/29/2014 (Basicsmedia) – GT Advanced Technologies Inc. (NASDAQ:GTAT)‘s stock tumbled on Thursday trading session by 4.79% after the company was downgraded’ by Raymond James analyst, Pavel Molchanov. The downgrade comes amidst the stock being 110% up in the market this year, according to CNBC’s Melissa Lee.
Molchanov believes that GT Advanced Technologies Inc.(NASDAQ:GTAT) Stock is overvalued despite the fact that it is set to be one of the main players with the release of iPhone at the back of its Saphire Material. GT Advanced Technologies Inc. (NASDAQ:GTAT) has reportedly announced that it expects to sell about $500 million worth of Saphire glass. The amount is expected to boost the company’s cash balance considering none of that amount was registered’ in the first half of the year.
“I think it is fully priced and adds some. The stock is up 110% up year to date. All of that is in anticipation of Saphire sales materializing to Apple Inc. (NASDAQ:AAPL),” said Mr. Molchanov.
The downgrade is entirely based’ on valuation’ rather than the impact of Saphire glass or solar products. Molchanov maintains that the current valuation GT Advanced Technologies Inc. (NASDAQ:GTAT) has all but factored the effects of the much-anticipated iPhone 6 and possibly iWatch.
The integration of Saphire glass into Apple Inc. (NASDAQ:AAPL)’s iPhone 6 also rages another debate as to whether consumers will afford the phone. IPhone 6 is expected to go on sale at a higher sales price if it goes forth and features Saphire for its cover.
“From the standpoint of Apple Inc. (NASDAQ:AAPL), it is not a big deal either way but for NASDAQ:GTAT, it is very relevant. So if it is an extra $50 maybe even $100 for a phone with Saphire cover. The question is will consumers gravitate to that model. Still an unanswered question,” said Mr. Molchanov.
Molchanov believes it will be extremely difficult for GT Advanced Technologies Inc. (NASDAQ:GTAT)’s stock to gain momentum in the market even with the release if iPhone 6 as it has already absorbed the impact of the same.