Barclays Capital Friday cut its target price for Apple shares, citing the “obvious economic weakness.”
“We believe it is prudent to cut our estimates given checks indicate a more pronounced slowdown within the PC supply chain and increased pressure on consumer spending,” wrote analyst Ben Reitzes.
The analyst firm cut Apple’s stock price to $135 from $180 but retained an “Overweight” rating for the Cupertino, Calif. company.
Barclays also reduced through fiscal 2010 its expectations for Apple revenue. The analyst believes the technology firm will report earning $8 billion for the fiscal fourth quarter of 2008, down from previously forecasted $8.3 billion. The quarter ended Sept. 30 and Apple is expected to Oct. 21 release its 4Q numbers.
The research firm predicts Apple revenue will also slow for fiscal 2009, projecting $38.6 billion compared to $40.8 billion previously expected.
Revenue will begin to bounce back somewhat by fiscal 2010, according to Barclays. Apple is expected to earn $48 billion that year, but down from the $51.6 billion previously thought.
Barclays expressed a strong outlook for iPhone sales, predicting 5 million iPhones were sold for fiscal 2008 – an increase from the 3.8 million the analyst firm had projected.
The higher iPhone sales comes amid expected an slowdown in Mac and iPod activity. The company now believes Apple will sell 2.76 million Macs (opposed to 2.96 million) during the fiscal fourth quarter of 2008 and trimmed iPod growth to 10 percent from 12 percent.
Although Mac and iPod sales may have slowed in the fourth quarter, an increase in gross margins compensated, according to the analyst.
Barclays predicted Apple will unveil a less-expensive “ultra-portable device” in early 2009, helping expand the Mac marketshare.
