Analyst Downgrades Apple In Face Of Slower Spending
7:32 am, September 29th, 2008, Ed Sutherland
Another analyst Monday joined the growing chorus voicing caution about how the economic downturn may finally be catching up with Apple.
RBC Capital Markets analyst Mie Abramsky downgraded Apple shares to “sector perform,” shaken by last week’s numbers indicating consumers were holding off purchasing Mac laptop and desktop computers.
Abramsky also trimmed his target price for Apple shares to $140 from $200 and cut his fourth quarter expectations. The analyst said Monday Apple is likely to report earning $32.8 billion, slightly off of $33 billion previously projected. The RBC analyst also lowered his prediction for 2009 to $40 billion from $42.5 billion once expected.
Abramsky pointing to last week’s ChangeWave Research report which showed fewer consumers plan to purchase a Mac over the next 90 days.
Prospective Apple laptop sales slipped to 29 percent from 34 percent in August. Intentions to purchase Mac desktops fell to 26 percent from 30 percent last month, according to ChangeWave.
Apple could turn things around by Tuesday announcing a low-cost iPhone or iPod, the analyst believes.
Last week, BMO Capital analyst Keith Bachman trimmed his Apple stock price target to $180 from $190 per share and cut fourth-quarter revenue projections to $7.88 billion from $8.03 billion.
ThinkEquity also lowered its Apple stock target to $170 from $200 per share and cut to $7.8 billion its fourth-quarter revenue prediction from $7.9 billion.
Apple is expected to release its fiscal fourth quarter report Tuesday.
Photo: Cishore/Flickr
Posted by Ed Sutherland in Apple, News | Comment on this article
Simple solution. Lower prices. I love my PowerBook G4, but haven’t upgraded either the software or hardware because I couldn’t afford to do so, even before this recent downturn. Now it will probably be impossible for me to do, and I worry about how much longer my ancient 2004 model will last.
Apple products are simply too expensive even in the best of times. If the economy continues to tumble, as it likely will, an expensive niche product line like Apple is in big trouble. If they are reduced to relying on iPods for revenue (as they may well be), they won’t survive for long. Jobs’ business model works well only for an affluent, expanding economy; a scarcity economy will put his company under. Apple doesn’t have to have a fire sale or reduce the price on every item, only on certain key items. If there isn’t some bowing to market realities on Apple’s part soon, the reason for this and other Apple blogs will soon be academic.
gkruz, on September 29th, 2008 at 9:09 am
4th fiscal quarter results -> Wednesday, 22 October. Not this Tuesday!
Paul Lustgarten, on September 29th, 2008 at 5:28 pm