14 DAY TRIAL // Morgan Keegan, one of the biggest research houses, has downgraded its rating on Apple from Market Perform to Underperform, claiming low consumer technology spending in the US, but also abroad, sources on the web inform.
Morgan Keegan analyst Tavis McCourt wrote:
"We are downgrading our rating on AAPL shares from Market Perform to Underperform based on mounting evidence of broad-based weakness in consumer technology spending in the U.S. and Europe.
We also expect that Apple's education vertical will be more challenged this year given state and local budget issues, which combined with what appears to be a more stable component pricing environment, we believe will lead to a deceleration in growth over the next 2-3 quarters.
We are maintaining our March estimates for Apple, but slightly lowering June, Sept., and Dec. quarter expectations for both iPods and Macs based on a difficult economic environment. We are now projecting Y/Y EPS growth to slow substantially over the next few quarters. We believe the upside potential in the shares if the Mac biz continues to outperform is outweighed by the downside risk if growth begins to slow, and are therefore downgrading to Underperform."
Travis McCourt pointed out three possible scenarios for Apple's fiscal 2008, as far as its shares are concerned. A "Realistic" scenario, in McCourt's opinion, brings the company's share price at no higher than $133, based on 33 percent Mac growth and 10 percent iPod growth, with a gross margin of 34 percent.
"Our conclusion is that with any decrease in Mac unit growth or gross margins, [per-share earnings] at Apple is negatively impacted," he added. "Given the macroeconomic environment, we believe it is more likely that Mac growth trends slow down throughout the year rather than continue at a 40 percent-ish pace," McCourt also added, according to AppleInsider.