Analyst raises AAPL target to $195 on Mac growth

Research firm Thomas Weisel Partners (TWP) on Monday upgraded Apple stock and set a target price of near its previous trading high, noting that the current price severely discounts the long-term growth potential and that any risk for a near-term earnings shortfall has faded. While most analysts have focused on the impending launch of Apple's "3G iPhone" that runs on AT&T's faster mobile network, analyst Doug Reid said that Apple will continue its longer-term growth through its core Mac business as well as continued roll-out of the iPhone to additional countries.

TWP's analyst also noted that Apple will achieve a 24 compound annual growth over the next five years through "defining and dominating new media-centric consumer product categories" such as iTunes and Apple TV.

"Over the next few years, we expect Apple to maintain above-peer operating margins, preserve its fierce brand loyalty and set a foundation for accelerating market share gains," Reid said in a note to clients obtained by the Associated Press.

According to the publication, the analyst also said that Apple will likely report a 24 percent compound annual revenue growth rate over the next five years, based on market share gains for its Mac computer business, geographic expansion of its iPhone line and continued success in

Reid raised his rating from "Market Perform" to "Overweight" as well as raised his price target to $195 (from $188), 27 percent higher than Friday's $153.08 close.

The analyst also raised his 2008 EPS (earnings per share) forecast to $5.23 (from $5.03), above the $5.13 average EPS of analysts polled by Thomson Financial.

Apple's stock was up 1.76 percent or $2.69 in pre-market trading.

Filed under: Investor, Apple
Other story tags: stock, target price, research firm, TWP