UBS Raises AAPL Target on Strong Sales Outlook

| Apple Stock Watch

UBS analyst Maynard Um is expecting Apple will show strong holiday sales numbers and will see continued high demand for its product lineup through 2011, so he’s raising his 12-month target price for the company’s stock from US$365 up to $415.

“We believe Apple’s FY1Q11 was supported by a strong product line-up that included some of the most heavily gifted items during the holiday season (iPad, iPhone, iPod), as well as strong buzz & demand for MacBook Air,” Mr. Um said. “With strong demand for its products for most of the quarter, we believe Apple is in store to report a strong Q1.”

He added that holiday shoppers were drawn to the lower price points of the redesigned MacBook Air. Apple introduced 11- and 13-inch MacBook Air models in fall 2010 with a price point starting at $999.

“Though we believe this would normally result in lower overall Mac gross margin, potential warranty accrual reversals (90bps impact last quarter), component pricing tailwinds, and iPad cost improvements should more than offset mix shift,” he said.

Looking forward, Mr. Um expects the just announced CDMA iPhone 4 on Verizon’s network will improve Apple’s gross margin even more. Expect to see that offset some by the release of the second generation iPad, and then to rebound again once the fifth generation iPhone ships.

Along with his new $415 target price, Mr. Um is raising his revenue estimate up to $24.5 billion from $23.9 billion, and is bumping up his EPS from $5.14 to $5.40. Apple is currently trading at $344.80, up 0.38 (0.11%).

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Comments

jfbiii

More bad news for Apple. Obviously the surging valuation of the company can only indicate that it is moving faster and faster towards getting its ass pwned by the Android collective.

mhikl

Now I have to take offence, jfbii. You are obviously trying not to leave any wiggle room for the forum’s reigning worm. I can say in your favour that at least you didn’t mention the 95% or so of profits that Apple continues to scam off the poor deserving Android riffraff. That would have been the lowest of blows.

RonMacGuy

You guys forget that according to the android genius who dwells among the Apple losers the financial success of Apple means absolutely nothing.  It’s all about market share.  That’s why Apple is going to fail and why android will “win” - with all its free apps and marked down phones.

grin

RonMacGuy

Hey, mhikl, did you see Bosco sling an insult my way in the “Win Tickets to Cirque du Mac 8.0 & Party with the Macworld All-Star Band!” thread?  He said that I would ruin their party if I attended!!  I really thought you would earn his wrath over me with your recent remarks!!  Maybe he has trouble remembering “mhikl” - RonMacGuy is so much catchier!!  Then I got in trouble for an off-color remark.  I need to try to be nicer I guess.

wink

Hey, I think I know why he is angrier at me.  He knows I am saving all of his false predictions for late 2011, when I post how wrong he was.  Hee hee, I can’t wait!!  Do you think he will admit it when he’s proven wrong, or just spin another tall tale?  We shall see…  Verizon iPhone - here I come!!

Constable Odo

Largest market share is always the best indicator that YOUR team is winning.  Raw unit numbers are like that plague of locusts that swarm through an area devouring everything in sight.  Android is that new plague of locusts just potentially eating its way through iOS devices in particular, leaving Apple with almost nothing.  The Android collective is swarming ever faster eventually displacing all non-Android OSes.

There have been rumors that Apple is quietly shutting down retail stores due to a fall off of consumer interest, so it’s only a matter of time before the rest of the Apple empire falls due to the massive weight of overwhelming Android device numbers.  It’s the Windows effect all over again.

RonMacGuy

Constable, you are hilarious.  Thanks for the laugh.  If you had any business sense, you’d know that market share isn’t everything.  For example, you can get the largest market share by giving away your coffee vs. selling it like everyone else, and probably approach 100% market share, but what good is it if you don’t make any money at it?  In that case, you go out of business.  But hey, you had the largest market share for a while…

As for your rumors, please stop making stuff up.  Fall off of consumer interest?  Have you been to an Apple store recently?  So, go ahead and play with your android junk and watch Apple stock, revenue, and profit continue to skyrocket.  In fact, you should buy some Apple stock if you actually want to make some money.

Tell me of one Apple retail store that has shut down.  Just one.  Go ahead.  Show me the “closed” sign on the front door.  You can’t.

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