Apple shares slump amid slowdown

 

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By Simon Aughton

Posted on 30 Sep 2008 at 11:05

Apple shares have dropped 16% after two analysts slashed their target price for the stock amid fears of a slump in consumer spending.

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Morgan Stanley analyst Kathryn Huberty claims Apple will be particularly hard hit by the slowdown, which will force PC spending to the lower-priced end of the market, where Apple is not a major player. She cut her target price from $178 to $115.

"We worry that consensus estimates have not been revised down to reflect slowing global consumer demand," she writes in a note to investors.

RBC's Mike Abramsky agrees, cutting his target from $200 to $140. Apple shares closed at $105.26, having opened at $119.62 and slipping to $100.59 at one stage.

Apple's market value has now fallen more than 40% since early August, not helped by chief financial officer Peter Oppenheimer's July warning that the company's profit margins would be hit by "a future product transition".

The Mac maker was not alone in seeing significant falls, though it was the hardest hit. Google lost 7%, Dell 4% and Microsoft 2.3%. Rival smartphone manufacturers also suffered: BlackBerry maker RIM fell 6% and Palm 5%.