BMO Cuts Apple Target Price Due To ‘Weak Economy’

10:06 am, September 25th, 2008, Ed Sutherland

Just days before Apple is to present its fourth quarter numbers, another analyst is trimming its revenue estimates. BMO Capital’s Keith Bachman said Thursday “the weak economy has started to take a toll on Apple’s system’s business.”

Bachman lowered the target price for Apple shares to $180 from $190.

Read more about the target cut and how other analyst appear to agree after this jump.

Bachman now expects Apple’s fourth quarter, which ends Sept. 30, to reach $7.88 billion, down from $8.03 billion previously projected. The BMO analyst said Apple will earn $40 billion in 2009, down from $40.6 billion earlier estimated.

A day earlier, ThinkEquity analyst Vijay Rakesh lowered his Apple share price target to $170 from $200. Rakesh also cut to $7.8 billion his estimate for next week’s numbers, a slight drop from a previous $7.9 billion fourth quarter projection.

Like Rakesh, Bachman pointed to an economy going south hurting Mac sales. Apple will have sold 2.71 million Macs during the fourth quarter, falling from 2.86 million units previously expected. Those lower projections carry over into the next fiscal year with Bachman expected Apple will sell 12 million Macs for 2009, a drop from 12.6 million earlier projected.

The more conservative sales projection echos Rakesh’s report which cited a move by consumers away from more expensive MacBooks and towards low-cost “netbooks” from PC makers.

Bachman offered two positive areas for Apple: the iPhone and lower component prices. The BMO analyst increased his expections for iPhone sales to 5 million units, up from 4.1 million phones. Bachman predicted Apple will sell 23.4 million iPhones in 2009.

The new estimate mirrors that of Piper Jaffray’s Gene Munster who earlier this week upped his iPhone sales projection to 5 million from 4.1 million units. Munster cited increased confidence Apple would beat Wall Street estimates.

The BMO Apple watcher also said Thursday low parts prices will help push Apple’s margin to 32 percent from 31.5 percent.

Posted by Ed Sutherland in Apple, News | Comment on this article