updated 12:10 am EDT, Fri April 15, 2005
UBS, ATR on AAPL
Financial firms ATR and UBS both held a $50 price target for shares of Apple just days ago, but the firms expressed very different views Thursday following Apple's announcement of financial results for the Mach quarter. American Technology Research on Thursday downgraded shares of Apple to "Hold" with a price target of $46. The firm cited concerns with slowing revenue growth and high investor expectations in its report. Meanwhile, UBS remained bullish on Apple, suggesting Mac sales could see a boost over the next several quarters. UBS increased its price target to $54, and maintained a "Buy" rating.
Concern over sustainability of growth
American Technology Research said it is concerned with Apple's slowing top-line growth, as indicated by lower than expected average selling price trends in both the company's iPod and Mac businesses. Average selling price declined 28 percent quarter to quarter, indicating stronger growth in lower cost products such as the iPod shuffle. The average price for Macs declined 9 percent quarterly, with a mix shift towards the Mac mini and iMac G5. The firm also cited high investor expectations, which will likely be met by a decreasing number of "big up side surprises" in the near future. "In our view, investors do not believe AAPL's guidance and have much higher unpublished expectations."
ATR believes 2 million out of the 5.3 million music players Apple shipped during the March quarter were iPod shuffles. (In line with 's estimate of 1.8 million units).
"We continue to believe Apple remains the best-positioned to capitalize on the digital music opportunity with arguably the industry's most powerful and complete stack of hardware, software, and service." Additionally, the firm believes that Apple's Mac business could accelerate with new product momentum and as more "switchers" buy Macs.
UBS maintains positive outlook
UBS remained bullish on Apple, suggesting Mac sales could see a boost over the next several quarters and issuing a new target price of $54 a share. "While some may have expected higher iPod sales & higher guidance, we believe results are impressive in terms of margins & laptop sales ... We also believe desktop sales in March were adversely impacted by anticipation of the Tiger OS set to ship in the June quarter. As a result, Mac sales could see a boost over the next several quarters from current levels."
AAPL continues slide
Shares of Apple fell for a second day Thursday on concerns that the company might not be able to produce another blockbuster product