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Thursday, January 18, 2007, 07:30 am PT (10:30 am ET)

UBS, PJ, CG, BS, GS, TE, AmTech all up Apple target, stock falls

Shares of Apple Inc. fell more than 3 percent in pre-market trading on Thursday as concerns over the company's outlook and Mac sales momentum outweighed simultaneous price target upgrades by nearly a dozen Wall Street firms.

During its fiscal first quarter of 2007, the Cupertino-based Mac maker said it sold 1.606 million systems, about 150,000 to 300,000 units less than most analysts had been anticipating.

For Apple, the 1.6 million unit total also represented a slight but uncharacteristic sequential decline between its fourth and first fiscal quarters. By comparison, Apple during its fourth quarter ended September sold a total of 1.610 million Macs.

Of similar concern to investors was the company's guidance for its second fiscal quarter of 2007 ending March, which came in soft at 54 cents to 56 cents per-share earnings on revenues of $4.8 billion to $4.9 billion.

"Management tends to guide conservatively, but we believe that as Apple becomes more of a consumer electronics company, we will see greater quarterly fluctuations between the quarters due to stronger and stronger holiday sales," said Ingrid Ebeling of JPM Securities, who took a different approach than most analysts on Thursday in downgrading shares of the company from a "Strong Buy" to "Market Outperform."

Meanwhile, analysts at nearly a dozen other firms looked past the Mac target miss and conservative guidance in upgrading their price target on shares of Apple.

"We maintain our Buy rating as we believe Apple is morphing into a four-prong vertically integrated play," said American Technology Research analyst Shaw Wu, who upped his price target on the company to $115 from $99. "We see several catalysts in the quarters ahead, including Mac OS X Leopard, new movie and carrier partners, lower cost cell phones, and further extension of its core technology franchise into new business areas."

A summary of other firms that increased their target on Apple follow:

  • Soleil — to $115 from $100
  • Goldman Sachs — to $110 from $102
  • Bear Stearns — to $130 from $125
  • Prudential — to $100 from $90
  • PiperJaffray — to $124 from $99
  • UBS — to $124 from $118
  • Citigroup — to $105 from $98
  • ThinkEquity — to $120 from $110

    Shares of Apple were trading down $3.26 or 3.43 percent to $91.69 in early morning trading on the Nasdaq stock market.