Bear Sterns Lifts AAPL Target on Strong Sales

by , 9:15 AM EST, December 6th, 2007

Apple laptop and iPod sales seem to be doing well this quarter. Well enough, in fact, for Bear Stearns analysts Andrew Neff, Bill Hand and Ted Chung to raise their target price for the company's stock from US$243 to $249.

Mr. Neff commented "We continue to see AAPL well positioned for the holidays given the confluence of product cycles for Mac (new iMac, low channel inventory, Leopard OS, BBY store expansion) and iPod (strong new product acceptance)."

Like American Technology Research analyst Shaw Wu, Mr. Neff expects that Apple's strong guidance for the December quarter will prove to fall short of actual earnings and sales. He is projecting the Cupertino company will show first quarter earnings per share between $1.65 and $1.75, will above Apple's $1.42 guidance and Wall Street's $1.54 estimate.

Revenue may come in above guidance as well. Apple is guiding at $9.2 billion, while the Street consensus is $9.33 billion. Mr. Neff, however, thinks Apple is likely to report $9.67 billion.

To keep the momentum going, Apple will need to stay on top of new products and innovation. "While we're encouraged by Apple's evolution into a company with multiple growth engines -- including our thesis that iPhone is emerging as a personal digital lifestyle device and view that video could be the next big driver -- we note that Apple will need incremental products (e.g., 3G iPhone, ultra-portable Mac, other products to be announced) in early '08 to buck seasonality issues," he said.

Bear Stearns is also raising its EPS estimates for fiscal 2008 from $5.25 to $5.40, and from $6.90 up to $7 for fiscal 2009.

Apple is currently trading in the pre-market at $186.47, up 0.97 (0.52%).

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