UBS raises AAPL to $170

UBS analyst Maynard Um has issued a new investor note, raising Apple's stock target from $160 to $170, while calling for a "Short Term Buy" rating. The new target is based on the assumption of a higher cash balance by the end of FY10. The rating is based on a more complex set of factors, but mainly a full quarter of refreshed MacBook sales, as well as continuing expansion of the iPhone 3GS to other countries. Whereas the iPhone 3G launched in 21 countries, the 3GS debuted in only eight.

Expanded iPhone sales in general may aid short-term profits, as could new iPods, and an unknown product thought to be coming to Verizon. Speculation has held it to be a 10-inch tablet, equipped with a 3G connection and a variety of iPhone-style apps, running simultaneously. A potential risk for investors is said to be gross margins, which could help or hinder Apple depending on whether people buy more expensive iPods and iPhones, and/or gravitate to Apple Stores when ordering Macs.

In all areas the company is said to be vulnerable to component pricing, which is currently a "wild card," according to Um. FYQ4 margins also tend to slide sequentially, but could be balanced this year by the 3GS and higher-profit iPods. Mac sales are predicted to continue rising from Q3.

by MacNN Staff