JPMorgan's Rod Hall Cuts Apple Target To $105, Lowers Apple Watch Estimates By 50%

JPMorgan's Rod Hall cut his Apple Inc. (NASDAQ: AAPL) Watch estimates by 50 percent and trimmed the price target by 16 percent.

Hall slashed his Apple Watch shipment estimates for fiscal 2016 to 11.9 million units from 23.5 million, adding they see the wearable only penetrating 7 percent "of its addressable base by the end of 2017 vs. previous assumption of 15%."

"We've seen demand weakness on that watch below what we had anticipated. We think it's a great product; it's just that the traction for these watches, people still haven't figured out what they want to use them for," Hall told CNBC.

Related Link: This Analyst Says Apple Watch Sales Are Surprisingly Strong

The analyst also slashed his price target on shares to $105 from $125 and said the "challenging short term fundamentals are likely to drive the stock lower until expectations are reset to the current macro reality."

"We believe that Apple has plenty of additional growth drivers that can propel earnings in 2017. However, macro demand weakness looks set to challenge fundamentals in 2016 vs. consensus expectations. This potential weakness in numbers is offset by an inexpensive valuation and the likelihood that 2017 is a significantly better year in our opinion," Hall said in a note.

According to TipRanks, Hall has a success rate of 40 percent with an average return per recommendation of +0.6 percent. The analyst is ranked 1,917 out of 3,971 analysts.