Apr 10, 1:00 PM EDT

Raymond James analyst says Apple Watch is a 'risk,' downgrades shares with stock near highs


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NEW YORK (AP) -- As consumers trekked to Apple stores to try on the company's smartwatch for the first time, a Raymond James analyst downgraded shares of the tech giant, saying its first product launch under CEO Tim Cook poses "more risk than reward."

Analyst Tavis McCourt downgraded the shares to "Market Perform" from "Outperform," saying fiscal 2016 is shaping up to be difficult year for the company compared to this year. While sales of the Apple Watch won't be a big part of the company's earnings for some time, McCourt said reviews have not been great and investors may start to worry that the company is going to struggle with launching new products.

"Early reviews on Apple Watch suggest it will fall far short of the `insanely great' benchmark, at least in this first iteration," he said. While Apple has launched several new versions of the iPhone in Cook's nearly four-year tenure as CEO, the Apple Watch is its first entirely new product in that time.

McCourt raised his profit and revenue forecasts because he thinks iPhones are selling well in China and expects an increased stock buyback by the company. He set a price target of $124 on the stock in January and expects shares to stay around their current prices.

Shares of Apple Inc. have climbed 69 percent over the last 12 months. They reached an all-time high of $133.60 in February and lost 29 cents to $126.27 in midday trading.

Consumers were allowed to pre-order the Apple Watch starting at 3 a.m. Eastern time on Friday. They can also make an appointment to come to Apple stores to try on the watch and test out some of its features. The first people who pre-ordered the device are expected to receive it in June.

Some analysts expect the company to sell 10 million to 20 million watches in the first year alone, but others are less optimistic. Based on a Raymond James survey, McCourt said around 22 million iPhone users plan to buy the product. That's a small percentage out of around 400 million iPhone users, he said, but it's a large number of buyers.

The Cupertino, California-based company is scheduled to report its fiscal second-quarter results after the market closes on April 27.

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