Analyst firm downgrades Apple shares. No, really.

In note to investors, concerns cited about Q2 sales falling short of estimates

A number of tech stocks were down Wednesday, so Apple's (NASDAQ: AAPL) drop through late morning of 8.25, or 2.4 percent, could just be part of the ongoing negative impact of the nuclear crisis in Japan on Wall Street. (Also see: Netflix shares soar because some analyst said something) Or it could be investor overreaction -- where have we heard that before? -- to a rare downgrading of Apple shares by an analyst firm. In a note to investors, JMP Securities said it was downgrading Apple to Market Perform from Market Outperform primarily because the analyst house doesn't think Apple will meet current second-quarter revenue estimates. JMP doesn't forecast a big miss, but lowered its own Q2 revenue estimate for Apple to $22 billion from $23 billion. However, this downgrading is based on some assumptions. In its note to investors, JMP warns of "risk associated with the notable deceleration in its primary manufacturing partner Hon Hai (Foxconn)." In other words, Hon Hai is shipping fewer products, which must mean Apple sales are slowing, according to JMP. Further, the analysts say, "iPhone sales appear to be tracking simply in line for the March quarter, there has been widespread weakness in computing as tablet demand has grown, and there is product transition risk around the iPad 2." Translation: We don't expect iPhone sales this quarter to blow us away, Mac sales might suffer because of the iPad 2's popularity, and Apple and its manufacturers might not be able to meet demand for the iPad 2. That's worth a downgrade?

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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