Pacific Crest maintained an Overweight rating on Apple (NASDAQ: AAPL) with a price target of $127. Analyst Andy Hargreave said other than a $50 price reduction, the company's iPhone SE announcement was "largely as expected." In his view, the iPhone SE will help reduce risk of trade-downs following the iPhone 7 launch.

"The iPhone SE’s form factor and features were almost entirely as expected. The biggest surprise was a $50 reduction to the entry-level price to $399 versus the iPhone 5s at $449. We do not believe the market is meaningfully elastic at these price points, so the price reduction is not likely to drive a significant increase in volume," said Hargreave.

"We believe the key for the iPhone SE is that it will allow Apple to maintain differentiation by screen size throughout the product lineup following the launch of iPhone 7. This should help avoid trade-down activity through the next iPhone cycle, which would have been a more significant risk had Apple pursued its traditional waterfall strategy and moved the iPhone 6 to the low-end price point," added the analyst.

Discussing the new 9.7” iPad Pro, Hargreave said, "Although the features of the newly announced 9.7” iPad Pro were in line with our expectations, the messaging was altered slightly to more directly target PC replacements. This likely reflects the saturated nature of the high-end consumer tablet market, which leaves Apple little choice but to more aggressively pursue PC replacements to try to find growth. Despite the change in tone, we believe use cases for PCs and tablets remain distinct for most people. Consequently, we do not expect the new messaging to drive a significant shift in the iPad sales trajectory."

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Shares of Apple closed at $105.91 yesterday.