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AAPL Stock: 100.96 ( -0.83 )

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Analysts up AAPL estimates after strong Q3 results

updated 10:55 am EDT, Wed July 21, 2010

Kaufman raises price target

Several analysts have raised their estimates for Apple stock following yesterday's high third-quarter profits. Kaufman's Shaw Wu has increased his price target by a dollar to $350, and FY2010 revenue and EPS forecasts from $60.3 billion and $13.80 to $62.9 billion and $14.25. 2011 predictions are now at $76.3 billion and $16.75, up from $73.1 billion and $16.50.

Wu notes that Apple generated roughly $1 billion more in Q3 revenue than expected, helped mainly by strong Mac and iPhone sales, though iPads contributed in line with expectations. The company has somehow managed to cope with supply constraints and large quantities of leftover iPhone 3G and 3GS inventory, Wu comments, and official revenue guidance of $18 billion for the next quarter is thought to be "more upbeat than usual." Performance has to be considered in light of several factors however, according to Wu, since Apple managed a lower tax rate, and did not accomplish its normal feat of beating gross margin estimates.

UBS' Maynard Um is holding to a $340 target, but raising FY2010 revenue and EPS estimates to $63.2 billion and $14.50, versus earlier figures of $60.37 billion and $13.55. FY2011 numbers have been pushed from $67.2 billion and $15.20 to $73.2 billion and $16.62. The analyst points out that since Apple is selling iPads and iPhone 4s as fast as it can make them, any upside to future results will probably be dependent on the pace of production.

Charlie Wolf of Needham & Co. is now calling for FY2010 EPS of $13.95, up from $13, and a FY2011 figure of $15.50, boosted from $15.25. For perspective he points out that despite quadrupling Mac shipments in the space of several years, Apple remains a small player in the computer market; the same relationship exists in the smartphone world, where the iPhone commands a "comparatively small" portion of sales. Though a new and unique device, the iPad is said to have already "jumped to the mainstream market," eating into competition from netbooks.








by MacNN Staff

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