UBS on Friday upgraded its view of Apple's stock from Neutral to Buy, with a US$265 price target, a large increase from the previous $170 target. Morgan Stanley also upped its target from $200 to $210, saying that it now expects Apple to ship 41.7 million iPhones in 2010, up from a previous 38.2 million estimate and driving a $7 billion revenue increase.
UBS based its bullish report on greater recurring iPhone sales driven by not only a growing install base -- it raised its FY10 sales estimate from 25.9 million to 36 million -- and the popularity of the App Store but also an expected end to AT&T's exclusive deal.
According to iStockAnalyst, the UBS report also envisions a possible next-generation service that will provide access to iTunes and MobileMe content from any Mac, iPhone, iPod, or to-be-announced Apple product. UBS bases that view on Apple's increasing capital expenditures, which have jumped from $128 million in the company's 2005 fiscal year to an estimated $840 million in its 2009 fiscal year, which concluded on Sept. 30.
As for new products, UBS sees a data-only product launched in conjunction with wireless carrier Verizon and the oft-rumored tablet, along with an expected refresh of Apple's desktop Macs.
In early trading Friday, Apple was up $2.82, or 1.56%, to $183.68 as of 9:48 AM Eastern time.