Here’s Why J.P. Morgan Just Slashed Apple’s Price Target by Lucinda Shen @FortuneMagazine June 16, 2016, 5:33 PM EST E-mail Tweet Facebook Linkedin Share icons Feeling uninspired by the Apple Watch? J.P. Morgan gets it. The universal bank lowered the tech giant’s price target aapl from $125 a share to $105 on Wednesday, and cut its 2016 guidance for the Apple Watch by over half. “We believe that Apple has plenty of additional growth drivers that can propel earnings in 2017,” a team of analysts led by Rod Hall wrote. “However, macro demand weakness looks set to challenge fundamentals in 2016 versus 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.” J.P. Morgan analysts say that the Watch unit shipments for 2016 will reach just 11.9 million, a sharp decline from its previous estimate of 23.5 million units. The bank added that the Apple Watch will penetrate just 7% of the addressable market. The bank however, kept the equivalent of a “Buy” rating on the stock. The price cut comes as Apple tries to focus more deeply on services rather than the hardware that has bulked up its sales for several years. Based on news from Apple’s suppliers, some onlookers have speculated that the iPhone maker will release the next generation Apple Watch in September, according to TechRadar. Others on Wall Street however have been more concerned about falling iPhone sales. But J.P. Morgan maintained its estimates for shipments of the smartphone in 2016 and 2017, saying 2016 sales will reach 204 million units. That’s lower than the 210 million to 220 units that that a major Apple supplier cited by the Nikkei most recently reported.