UBS Raises AAPL Target Following Q4 Earnings Report

· by · Apple Stock Watch

Apple reported record breaking numbers yet again during its fourth fiscal quarter earnings report on Monday, and UBS analyst Maynard Um thinks there’s still plenty of room for Apple to grow. The Mac and iPhone maker may have seen a drop in its stock following its earnings report, but Mr. Um thinks that number will go back up and raised his target price for the company from US$350 to $365.

Mr. Um cited Apple’s upcoming product releases as boosters for Apple’s stock through 2011. “Apple has one of the strongest and visible 2011 product releases in our group including new OS/MacBook Air potentially this week, CDMA iPhone (Jan/Feb),new iPads (Mar/Apr), iPhone5 (Jun), etal which we see as catalysts,” he said.

Apple reported $20.3 billion in revenue for the quarter, along with $4.34 billion in profit. The company sold 3.89 million Macs, 14.1 million iPhones, 4.19 million iPads, and 9.05 million iPods during its fourth fiscal quarter.

iPhone sales beat Mr. Um’s estimate of 11.3 million units, but iPad sales fell short of his 4.5 million projection.

“Apple guided gross margins of 36 percent(UBSe: 39.4%, Street: 39.3%) resulting in EPS of $4.80 (UBS estimate: $4.70, Street: $5.06),” Mr. Um added. “Guidance implies a material drop in iPhone 4 gross margins — and likely slightly lower iPad margins — due to a more rich feature set. With ASP up sequentially, we see this as largely component related.”

Looking forward, Mr. Um is raising his fiscal year revenue estimate from $81.2 billion up to $91.5 billion, and is bumping up his EPS estimate to $19.38 from $18.09.

Mr. Um is maintaining his “Buy” rating, but raised his target price fro Apple’s stock from $350 up to $365. Apple is currently trading at $311.84, down 6.16 (-1.94).

Jeff Gamet

Jeff Gamet

Jeff is the Mac Observer's Managing Editor, and co-host of the Apple Context Machine podcast. He is the author of "The Designer's Guide to Mac OS X" from Peachpit Press, and writes for several design-related publications. Jeff has presented at events such as Macworld Expo, the RSA Conference, and the Mac Computer Expo. In all his spare time, he also co-hosts the We Have Communicators podcast, and makes guest appearances on several other podcasts, too. Jeff dreams in HD.

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2 Comments

Lee Dronick

I wonder in which direction the stock will move after the Back to Mac event tomorrow.

Bt46n2

We have been tracking distribution in AAPL’s uptrend, yesterday it was quite pronounced. You can see the charts here

http://www.trade-guild.net/2010/10/earnings-bermuda-triangle-and-3c.html#links

This looks to be a change in market sentiment as there is accumulation in the Dollar Index and related ETFs as well.

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