The iPhone cycle that drove Apple shares higher this year is near its end, according to one Wall Street firm.

Nomura Instinet lowered its rating for Apple shares to neutral from buy, citing the company's high valuation compared with previous iPhone cycles.

"We argue that the stock's gains for the iPhone X supercycle are in the late innings. We believe unit growth, if not quite ASP growth, is well anticipated by consensus and a historically full multiple," analyst Jeffrey Kvaal wrote in a note to clients Tuesday.

Apple shares fell 1.1 percent in early trading Tuesday after the report.

The company is one of the market's best-performing large-cap stocks this year, rallying 52 percent through Monday versus the S&P 500's 20 percent gain.

Kvaal noted that Apple is trading at a valuation of 15 times estimated 2018 earnings. He said during the iPhone 6 cycle, the company's earnings multiple peaked at 15 times earnings and then declined to 9 times earnings. The analyst also noted that the smartphone maker's stock went from 13 times earnings to 8 times earnings during the iPhone 5 cycle.

The analyst reduced his price target for Apple shares to $175 from $185, a 1 percent downside to Monday's close.

"Apple is certainly not the same company as it was five or even three years ago. The growth in its services business is a particularly notable departure though hardly the only one," he wrote. "We do believe Apple's improvements merit a richer multiple than in prior years, though marginally so. We do not consider any of these sufficient, either individually or in aggregate, to flout the historical precedent."

Apple is one of the most popular stocks on Wall Street and Main Street and rarely gets negative opinions from the former. The last time the stock was downgraded was by Mizuho Securities on June 11. Apple shares are up 18 percent since then.

Of the 38 analysts who cover Apple, 31 have a buy rating. The rest have a hold rating, including Nomura Instinet, according to FactSet. Zero say sell.

The company did not immediately respond to a request for comment.