Bear Stearns Raises Estimates on Apple on iPod Strength

Bear Stearns raised its estimates on Apple Friday. In a research note to clients, Bear Stearns cited stronger iPod and was characterized as "less of a seasonal decline" in hard drive iPod sales for the Mac quarter. The firm raised its 12 month target to US$97, up from $87, and boosted estimates from 43 cents per share to 48 cents per share for the quarter.

Revenue estimates were bumped from US$2.99 billion to $3.17 billion. Appleis own guidance for the quarter is 40 cents per share profit on revenue of $2.9 billion.

According to a Forbes report, Bear Stearns said that "feedback from sources, including iPod component vendors such as Synaptics, PortalPlayer, Seagate Technology and Toshiba, and MP3 vendors such as Creative Technology, iseem to suggest an expectation for less than normal seasonal declines in the HDD-based iPod business for Apple and the broader HDD music player category for the March quarter.i"

Bear Stearnsi target price of $97 per share is higher than any other Wall Street firmis target price except Piper Jaffray, where analyst Gene Munster has had a $100 per share target for Apple since November of 2004. Other firms covering Apple have price targets in the $75-$85 range.

Throughout 2001 and 2002, Bear Stearns analyst Andrew Neff repeatedly advised and predicted that Apple would move the Mac OS X platform to Intelis line of processors. Since that time, Mr. Neff has backed off those predictions, and Apple has stayed steadfastly with the PowerPC platform.

Apple stock closed at 70.49, a gain of 0.03 (+0.04%), on moderate volume of 16.3 million shares trading hands.

Full Disclosure: Bryan Chaffin owns shares in Apple.

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