Kulbinder Garcha from Credit Suisse began covering Apple for investors on Thursday, and started off with a target price of US$500 for the Mac, iPhone and iPad maker’s stock.
Mr. Garcha expects Apple will do well thanks to the popularity of the iPhone, according to Forbes. “Across the key smartphone success factors of software, services, product portfolio, distribution, brand, [intellectual property], and chip set efficiency, we believe, three years after the launch of the iPhone, few competitors have managed to narrow Apple’s advantage,” he said.
iPhone sales will hit 72 million units by the end of fiscal 2011 and 112 million in fiscal 2012, according to his estimates.
He also expects the iPad will earn Apple some $34 billion by the end of fiscal 2012, and that iPad gross margins will hit 35 percent by the end of fiscal 2011.
Along with his $500 target price, Mr. Garcha is rating Apple’s stock as “Outperform.” Apple is currently trading at $338.74, up 8.73 (2.65%).