Here's Why Nomura Remains So-So On Apple

In a report published Tuesday, Nomura analyst Stuart Jeffrey commented that Apple Inc.'s (NASDAQ: AAPL) pricing of its new products were "impressive," but the features "less so."

Jeffrey noted that a strong health monitoring capability and contextually predictive information display capability could drive strong adoption of the new smartwatch. However, the analyst argued that these new capabilities "do not seem well developed."

"We expect revenues to stabilize at the current run-rate given the huge success of the iPhone 6/6 plus, which we suspect triggered some pent-up demand," Jeffrey wrote. "Growth from current levels would likely require Samsung's Galaxy S6 (S6 Edge) to disappoint, yet initial reviews and order momentum for the new Galaxy phones seem strong."

Jeffrey added that the watch does not begin selling until after the company's second quarter results. At that time, the analyst expects management to provide an update on its capital return plans.

Bottom line, with further upgrades likely to be "more limited in scope" and a multiple within 10 percent of the market multiple, shares remain Neutral rated with a price target raised to $129 from a previous $123.