Shares of Synaptics Inc., which makes input and control devices for computers and consumer electronics, fell on Thursday after an Oppenheimer & Co. analyst downgraded the company, citing competitive pricing for Apple Inc.'s upcoming new iPhone.
"We believe Synaptics has run up on hopes that its emerging role as a key supplier to iPhone-like devices would lead to upward estimate revisions. We believe Synaptics is well positioned for this market, but are concerned that newly competitive iPhone pricing (now starting at $199) will limit the market opportunity for Synaptics' stable of potential customers," analyst Yair Reiner wrote in a note to clients.
The analyst lowered his rating to "Perform" from "Outperform." He also removed his $35 share price target after Synaptics stock surpassed it.
In afternoon trading, Synaptics shares fell $2.74, or 6.6 percent, to $38.98. The stock has ranged from $22.03 to $61.72 over the past year.
"The iPhone-killer business will be a tough one, in our view," Reiner wrote.
He also cited "continued lack of visibility" in Synaptics' role in portable music players, possibly indicating a lower share of Apple's iPod business in the second half of the year.
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