Thomas Weisel on AAPL

An analyst for the Thomas Weisel research firm, Doug Reid, says he has raised his estimates for Apple's stock performance based on meetings with the company's management. EPS for the 2009 fiscal year is now expected to be $5.83 instead of $5.77, while the FY10 figure has been raised from $6.06 to $6.51. A price target of $180 has been set for Apple stock, with an Overweight rating.

Although revenue forecasts have not risen, Reid suggests that Apple should have higher-than-expected gross margins. "Following our meetings we expect positive benefit from deferred iPhone gross margin to more than offset potential headwinds from rising component costs or likely lower ASPs [average selling prices] on future, lower-cost MacBooks," the analyst comments. In particular, he observes that Apple executives have a "clear preference" for shedding the exclusive carrier arrangements that mark iPhone sales in many countries.

Apple is for instance "making every effort possible to road map toward an agreement with Verizon in the US," according to Reid, and it is most likely in a position to finalize a deal with China Unicom before the end of the year.

Executives are said to agree with the idea that low-end MacBooks appear "tired," and Reid proposes that the company will eventually release a model costing between $700 and $800. Tablet rumors are argued to be overblown, to the extent that Apple is "less likely to pursue a tablet than many investors expect."

A stock repurchasing program is predicted to begin within a year, based on the growing amount of cash the company has stockpiled.

by MacNN Staff