J.P. Morgan raises AAPL

J.P. Morgan maintained an "overweight" rating on Apple, but , saying it has "increasing confidence" in Apple's digital music business. The research firm raised fiscal 2005 and 2006 per-share earnings estimates to $1.48 and $1.91, from $1.28 and $1.53, respectively. "The success of Apple's digital music initiatives has been established, but its sustainability is still a hotly debated topic," J.P. Morgan said. "We believe the potential profitability of Apple's music business is highly dependent on whether or not the company can maintain its dominance in the portable music player market and avoid profit compression from commoditization." The research firm said Apple can avoid profit compression by maintaining its "closed system" approach, as well as technical and legal barriers to entry.

by MacNN Staff