Morgan Stanley analyst Yuuji Anderson on Thursday weighed in on Fitbit Inc.'s FIT, +1.90% 7% stock price decline in the wake of Apple Inc.'s AAPL, +1.51% announcement of its new watches. He wrote that while the drop "rightly reflects concerns over the pace of software and sensor improvements to the Fitbit ecosystem," Fitbit and Apple also compete at different price points. His underweight rating and $4 price target on Fitbit shares aren't so much based on the expectation that the company will lose share to Apple, he wrote. "We are more concerned that the health and fitness functionalities between the Versa and Charge 3 are not sufficiently differentiated to avoid cannibalization and its aggregate demand will not sufficiently offset legacy product declines exiting the year," said Anderson. The Charge 3 is Fitbit's latest fitness tracker, while the Versa is its most recent smartwatch. Shares are up 2.2% in Thursday's session, though they're down 15% over the past 12 months. The S&P 500 SPX, +0.54% has gained 16% in that time.
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