(Bloomberg) -- Apple Inc. was downgraded at KeyBanc Capital Markets Inc., which said shares of the iPhone maker are trading near all-time high valuation levels though its sales growth is likely to slow.

“US sales are likely to struggle” on a challenging upgrade cycle for the iPhone amid slower consumer spending, analyst Brandon Nispel wrote in a note, cutting his rating on Apple to sector weight from overweight. In addition, “international growth expectations for reacceleration may be aggressive,” he added.

Shares of Apple are still up 33% this year, though they have retreated nearly 13% from their July record high amid the tech selloff sparked by concerns over high interest rates. Last month’s unsurprising launch of new iPhone models has done little to help reignite the rally. The stock edged lower on Wednesday. 

While early orders for the iPhone 15 Pro Max has been better than expected, they seem to reflect a demand shift to the more premium Pro Max models from the cheaper Pro versions, said Nispel.  

While this will help lift the average selling price, it means little change in overall unit sales, according to the analyst. Nispel downgraded his rating on the stock for the first time since taking coverage in 2021, according to data compiled by Bloomberg. 

To be sure, Nispel ranks lower among analysts covering Apple based on total returns, according to Bloomberg data.

Despite the weak outlook for its core product, Apple’s stock is still trading at “a large premium” to the Nasdaq in terms of historical earnings and cash flow multiples, Nispel said. Justifying such a level requires investors to apply “near-peak” valuations for Apple or for its growth outlook to improve, he added.

Separately, Chief Executive Officer Tim Cook sold stock worth about $41 million after taxes in his biggest sale in more than two years.

--With assistance from Subrat Patnaik and David Watkins.

(Updates stock moves in third paragraph. An earlier version of this story was corrected to say demand in place of users in fourth paragraph.)

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