Oppenheimer, Merrill Lynch analysts raise AAPL targets
updated 12:05 pm EDT, Thu October 1, 2009
Each cites unexpected factors
Two prominent analysts of Apple stock have raised their price targets, Barron's writes. Oppenheimer analyst Yair Reiner has increased his target from $185 to $210, also pushing EPS estimates up to $1.50 for the September quarter, and to $5.97 for FY09. FY10 EPS is now predicted to be $7.76, a jump from $6.49.
Reiner argues that Apple is deriving an increasing portion of its revenue from the iPhone, which may be very beneficial to profits thanks to high margins. Gross margin in the September quarter is expected to be 37.3 percent, as compared to a Street consensus prediction of 35.4 percent, and Apple's own guidance of 34 percent. Investors are still underestimating the earnings Apple can produce under GAAP accounting, says Reiner.
Bank of America/Merrill Lynch analyst Scott Craig has shifted his price target from $185 to $220, raising a September-quarter EPS forecast to $1.47, and numbers for FY09 and FY10 to $5.93 and $7.64. Craig suggests that the gross margin for non-iPhone products is most important, as it is also based on a growing mix of high-margin offerings, aided by surprisingly good component pricing. Apple's overall gross margin for the September period is anticipated to be 36.7 percent.
Fresh-Faced Recruit
Joined: Aug 2007
Pretty decent upgrades, but...
we'll see how well Apple does by the end of the year. I think these upgrades are undoubtedly holding Apple shares from dropping to $180 and once the market starts moving up again, Apple will rise steadily into the $190 range. At least that's my hope.