Analyst: Apple Is One of the Best Growth Stories in Tech

Apple's results for its first fiscal quarter were solid enough to lead Barclays Capital to conclude that the company, "is one of the best growth stories in the tech space over the long-term." In a research note to clients obtained by The Mac Observer, Mr. Reitzes affirmed his price target of $113 a share, based on a 20X multiplier of his estimates of fiscal 2010 profits of US$5.60 per share.

The analyst also said that the biggest risk to the company is the economy, as opposed to, for instance, competition or any management issues regarding the health of Steve Jobs. Still, the economy is a big factor, and it caused Mr. Reitzes to lower some of his estimates for the company for fiscal 2009.

"Despite a solid quarter," he wrote, "we want to take this opportunity to lower our near-term estimates for Apple given the very weak economy and prospects for lower PC, iPod and handset market growth."

For Q2 2009, Mr. Reitzes lowered EPS estimates from $1.05 to $.98 based on Apple's most recent guidance for the quarter. They also factor in lower returns on Apple's vast cash holdings investments. For the full year, he puts his EPS estimates at $4.85, up from $4.75. He expects revenue to rise 8% year-over-year to $35 billion.

For fiscal 2010, he is estimating EPS of $5.60, down from $5.70, and 12% year-over-year revenue growth to $39.3 billion, down from $40.5 billion.

Mr. Reitzes currently rates AAPL at Overweight, a rating that means he advises clients to hold more Apple stock than that of the rest of its particular sector.

AAPL closed the day at $88.36 per share, up $5.53 (+6.68%) on moderately strong volume of 49.5 million shares.