Apple downgrade forecast takes bite out of share price
Apple fell the most in almost two months on the Nasdaq after an analyst downgraded the stock, citing risks related to manufacturing partner Foxconn Technology.
Alex Gauna, an analyst at JMP Securities LLC, said slower sales growth at Foxconn, whose Chinese factories make Apple devices, may signal lower-than-expected revenue for Apple.
Sales growth at both companies were tightly coupled last year, Mr Gauna said in a research note yesterday in which he lowered his rating on Apple shares to "market perform" from "market outperform."
The downgrade is the first for Apple since October.
Of the 55 analysts covering Apple that are tracked by Bloomberg, 50 recommend buying the shares while five rate it a "hold". Gauna cut his second-quarter sales target on Apple to $22bn (€15.8bn) from $23bn, and his profit estimate to $5.10 a share from $5.49.
Apple, based in California, fell $16.16, or 4.7pc, to $329.27 at 2.28pm New York time, compared with a 2.1pc drop in the Standard & Poor's 500 Index. The decline was the biggest since January 18.
Foxconn's sales growth slowed to 26pc in February from 84pc in December.
The cause may be iPhone and iPad 2 sales, Mr Gauna said. The earthquake and tsunami in Japan also present near-term risks, he said.