Goldman Sachs Downgrade Sends Apple Lower

Shares in Apple Inc. fell Monday after Goldman Sachs analyst David Bailey downgraded the company to Neutral from a Buy*. Mr. Bailey cited concerns of weakening consumer demand during the first half of 2009 that could slow sales of MacBooks, iPods, and iPhones.

Mr. Bailey cut his profit estimates for 2009 to US$4.75 per share, down from $5.13 per share. He cut his target price for the stock to $115 per share, down from $125 per share, but still higher than the stock is trading currently.

AAPL ended the day at $94.75, down $3.52 (-3.58%), on moderately light volume of 31.7 million shares trading hands.

The analyst also told investors that he felt Apple was no likely to introduce new products during Macworld 2009, which will be held early in January in San Francisco. He added that barring any positive news from the company, the premium that investors have placed on the company will continue to unwind during 2009.

* One mainstream report was republished around the Internet that erroneously said Mr. Bailey cut AAPL to a Buy from a Neutral, inverting the actual ratings changed.

** In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.