Street expectations for Apple are too high and investors will be disappointed by iPhone growth in fiscal years 2018 and 2019, Deutsche Bank analyst Sherri Scribner tells investors in a research note titled "FY-18 'supercycle' is more likely just a cycle."

She believes the market has become "overly optimistic" on iPhone's potential sales into this fall's launch while ignoring the fundamental challenges Apple faces in the smartphone market, such as saturation in mature markets, elongating refresh cycles and increased competition in China.

The analyst continues to view Apple as a "trading stock" and sees "modest downside risk" to current near-term expectations. Longer term Scribner believes Apple shares are fairly valued in the $130 range. She upped his price target for the stock to $132 from $130 and keeps a Hold rating on the iPhone maker. Apple closed yesterday up 88c to $145.06.