By Sam Oliver

Published: 11:00 AM EST

The Royal Bank of Canada cut its price target on shares of Apple friday to $70 from $125 and also downgraded the stock to 'Underperform' on concerns of reduced earnings growth as well as uncertainty about the company's leadership.

In a report to clients, analyst Mike Abramsky said he's uncomfortable with Apple chief executive Steve Jobs' unexpected leave of absence, which raises questions about near term leadership, as the company has failed to articulate a clear succession plan.

"Jobs is widely viewed as Apple's chief innovator, dealmaker, leader, deeply involved in minute decisions, inextricably tied to Apple's brand," he wrote. "Jobs' being sidelined for 6 months or more and unavailable day-to-day -- with no clear successor -- in our view raises risks to Apple's sustaining its stellar record of innovation going forward."

Abramsky also cited data from his firm's proprietary Changewave survey released thursday, which indicates further deterioration in consumer electronics spending over the next 90 days. More specifically, it showed that only 28% of respondents are planning to purchase a Mac notebook in the next three months, down from 33% in November, and just 30% planned to buy iPhone 3G this past December, down from 34% in September.



"Beyond near-term issues (lowered EPS estimates, deterioration in consumer spending and the leadership void) and pending evidence to the contrary, we believe it is prudent to adopt a more conservative approach to the target valuation multiple," he advised clients. "Including a 'Steve Jobs' premium and cash ($27.07 per share), Apple had been trading at 17x, but could correct towards the market (Nasdaq at 13x, PC/wireless peers at 10-12x)."

Shares of Apple were trading down $2.287 (or 2.74%) to $81.093 on the Nasdaq stock market.