Shares of Apple Inc plunged to a 52-week low on Monday and flirted with the US$100 line after analysts downgraded the stock because they believe slowing consumer spending will hit its computer business.
The downgrades compounded losses in the general market because of the continuing credit drama.
The stock fell US$22.98, or 17.9 percent, to close at US$105.26. Earlier in the day, the shares touched US$100.59, the lowest level since early last year.
Morgan Stanley analyst Kathryn Huberty downgraded Apple to “equal-weight” from “overweight,” saying she was concerned that growth in the Macintosh unit is slowing down.
The computer market is feeling the weakness in consumer spending, and Morgan Stanley’s analysis indicates that growth will shift to the low end of the market, where Apple doesn’t really play, Huberty said.
Huberty also said that even in the best of cases, Apple’s earnings growth will slow down from the quarter that ended in June.
Huberty cut her earnings estimate for fiscal 2009, which just started, to US$5.47 from US$5.91 per share.
RBC Capital Markets analyst Mike Abramsky reduced his rating on the stock to “sector perform” from “outperform” for similar reasons. He noted that the bank’s surveys of consumers indicated a big drop in the number intending to buy Macintosh computers and trimmed his estimate for fourth-quarter Mac sales to 2.9 million from 3 million.
Abramsky raised his iPhone sales estimate to 6 million units from 5 million, but he still trimmed his fiscal 2008 earnings estimate by US$0.02 to US$5.26 per share. He put fiscal 2009 earnings at US$5.47 per share, down from US$6.07.
Apple has already forecast a drop in margins for just-ended quarter and next year because of back-to-school promotions and the launch of new products.
Apple’s stock had a banner year last year, more than doubling in value. It set a 52-week high of US$202.96 at the end of the year. With Monday’s decline, the stock has given back most of last year’s gains.
Shares of Dell Inc fell US$1.59, or 9.4 percent, to US$15.41.
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