Canaccord Raises AAPL Target on Strong iPhone 5s, iPad 5 Sales

| Apple Stock Watch

Canaccord Genuity analyst Michael Walkley sees the just released iPhone 5s and the still unannounced fifth generation iPad as big sellers for Apple and is raising his target price for the company's stock from US$560 up to $580. He also expects an iPhone deal with China Mobile will give Apple another boost.

Michael Walkley raised his AAPL target on the prospect of new iPad modelsMichael Walkley raised his AAPL target on the prospect of new iPad models

Mr. Walkley told investors,

With our expectations for a full redesign for iPad 5 and increased near-term iPad 5 versus iPad mini supplier build rates, we believe December quarter iPad sales mix will shift toward the iPad 5 versus iPad mini. The iPhone and iPad mix shifts should result in stronger holiday quarter ASPs and margins versus consensus expectations. For fiscal 2014/15, we believe a TD-LTE iPhone launch with the world's largest carrier China Mobile will bolster March quarter sales and offset some of the post-holiday seasonal trends in Western markets, and we believe Apple is well positioned to exceed forward consensus sales and margin estimates despite our expectations for more aggressive iPhone 5c pricing to drive international volumes in calendar year 2014.

He added that Apple's ongoing stock buyback program will drive Earnings Per Share growth for investors in fiscal 2014 and 2015.

iPhone 5s inventory has been in short supply ever since the handset launched in September and demand has remained high. The new iPhone model introduced Apple's 64-bit A7 processor, the M7 motion coprocessor, and the Touch ID fingerprint scanner, and it's possible all three will be included in the next iPad model, too.

Apple will be hosting a special media event on October 22 where the company is expected to introduce new iPad and iPad mini models, and possibly new MacBook Pro models. The event may also give us launch dates for OS X Mavericks, and the new Mac Pro, both of which have been promised for this fall.

Mr. Walkley is maintaining his "Buy" rating for Apple's stock. Apple is currently trading at $500.73, up 2.05 (0.41%).

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