(Reuters) - A rare quarterly earnings miss at Apple Inc (AAPL.O) prompted several price target cuts on the stock, but with the next iPhone looming, most analysts see the selloff as a buying opportunity.
Shares of Apple, the world's most valuable technology company, were down 4 percent at $575.80 in Wednesday morning trade after the company's third-quarter results missed market expectations owing to a weak European economy and delayed customer purchases ahead of a new iPhone launch.
"Owning Apple ahead of iPhone product cycles pays off," Morgan Stanley analyst Katy Huberty wrote in a note, referring to the stock's usual post-lauch bump.
"This is likely one of the last buying opportunities ahead of the iPhone 5 launch as we expect headwinds to reverse in the calendar fourth quarter."
Apple shares are famous for climbing new highs after product launches -- even though many of these debuts are well anticipated by industry insiders and Apple enthusiasts.
They have risen 13 percent since the launch of the new iPad in March this year and more than doubled since the iPhone 4 debuted in June 2010.
Apple has a great deal riding on its next iPhone, the product responsible for more than half its revenue and for helping shore up overall margins.
While it has not set a release date, Apple is widely expected to launch the next iPhone in October.
"Since we think Apple will launch a new iPhone, iPad, and TV in the next few quarters, we believe that Apple's stock will move higher through year-end," BMO Capital markets analyst Keith Bachman said.
Bachman lowered his target price on the stock by $20 to $680, but that's still above the all-time high of $644 that Apple shares touched earlier this year, as well as Tuesday's closing of $601.28.
"Flattish trends in Europe are potentially a sign that the iPhone's share gains might become more muted going forward (and the economy isn't helping either)," said Raymond James' Tavis McCourt, who cut his rating on the stock a notch to "outperform.".
J.P. Morgan Securities cut its price target on the stock to $675 from $695, Raymond James slashed it to $730 from $800, and Canaccord Genuity reduced its target slightly to $797. Goldman cut its price target to $790 from $850.
But 13 other brokerages maintained their price targets and Thomson Reuters' StarMine data showed that 22 analysts still rate the stock a "strong buy," while 26 rate it "buy,".
Four have a "hold" rating and just one rates the stock a "strong sell." The mean price target is still $726.11 -- around 20 percent above current levels.
J.P. Morgan analyst Mark Moskowitz conceded that Apple -- known for posting blow-out results even in a weak economy -- is susceptible to sputtering growth in China and a struggling European economy.
"Apple's China business also slowed, and while Apple commented that its China business was not hurt by macro pressures, we think this risk lingers," Moskowitz said.
The analyst also raised concerns over the greater-than-expected decline in the average selling price (ASP) of the company's products and the slowdown in its China business.
Overall margins have been falling as sales of the iPad -- less profitable than the iPhone -- go up.
"The accelerating rates of decline in blended ASPs of iPhone and iPad, as estimated by the J.P. Morgan IT Hardware research team, could imply that Apple is being forced to test price-elasticity to drive incremental demand," Moskowitz warned.
Shares of the Cupertino, California-based company closed at $600.92 on Tuesday on Nasdaq.
Reporting by Himank Sharma and Aditi Sharma in Bangalore; Editing by Tenzin Pema, Rodney Joyce, Anthony Kurian