Canaccord Bumps AAPL Target to $500 on Strong iPhone Sales

AAPL in the morningDemand for Apple’s iPhone isn’t showing signs of slowing down, and Canaccord Genuity analyst Michael Walkley thinks that trend won’t change any time soon. He raised his twelve month target price for Apple’s stock from US$485 up to $500 on Friday, based on his channel checks, and expects iPad 2 sales to remain high as well.

“Our June channel checks indicated strong sell-through trends for both the iPhone and iPad,” Mr. Walkley said. “Based on solid demand trends for iPhone/iPad, poor sell-through trends for competing tablet offerings, and the ramping iOS ecosystem driving longer-term replacement sales, we believe Apple will maintain dominant value share of both the tablet and smartphone markets to drive healthy long-term earnings growth.”

He added that his market checks showed the iPhone 4 was the top selling smartphone in June for both AT&T and Verizon.

Mr. Walkley expects Apple will introduce a new iPhone model in September, just as several rumors suggest. That new phone will likely boost iPhone sales even more.

“Based on our checks indicating healthy global sell-through trends combined with our belief Apple remains on track to ship its new iPhone by September, we have increased our C2011 iPhone sales estimate from 75.5 million to 77.3 million units and our calendar year 2012 estimate from 94.0 million to 100.2 million units,” he said.

Mr. Walkley raised his iPad sales estimates for 2012, too, from 53.8 million units up to 55.1 million.

Mr. Walkley is maintaining his “Buy” rating for Apple’s stock to go along with his new $500 target price. Apple is currently trading at $358.07, up 0.87 (0.24%).