Morgan Stanley Upgrades Apple to 'Overweight'

Morgan Stanley became the fourth analyst this week to raise its estimates for Apple this quarter, upgrading Apple to "overweight" Friday. The firm said it believes the iPod halo effect -- PC iPod owners switching to Macs -- is roughly double what the market expects.

Analyst Rebecca Runkle set a $60 price target for Apple and raised her fiscal year 2005 earnings per share estimates to $1.31 on revenue of $16.9 billion.

Runkle believes that all PC makers could be hurt by users switching to Macs, but believes that Hewlett-Packard, which has a strong retail presence, is at the greatest risk.

On Monday J.P. Morgan raised its fiscal year 2005 earnings per share estimates for Apple to $1.15 on revenue of $13.57 billion; on Tuesday, Credit Suisse First Boston also raised its earnings estimates to $1.15 per share on revenue of $13.4; and Goldman Sachs said it expects Apple to post earnings of $1.12 per share for the fiscal year Thursday.