Gabelli & Co Starts AAPL Coverage with Buy Rating

Gabelli & Co. analyst Hendi Susanto has begun covering Apple and is starting off by rating the company’s stock as a “Buy.” Much of Mr. Susanto’s rosy outlook is based on what he calls Apple’s “ecosystem,” and not just on hardware sales, according to Barrons.

Based on his models, Apple will have some 290 million iPhone, iPad and iPod users by September 2011, and that ach of those users will average US$25 in related purchases from the company. By September 2015, he expects the number of iOS device users will jump to 680 million.

Mr. Susanto added that “the network effect due to the expanding universe of Apple users is cementing iTunes as an industry standard platform for content.”

By the end of Apple’s fiscal year in 2012, Mr. Susanto expects Apple will have $97 billion in cash. With that much money in the bank, he expects Apple will see some pressure from investors to do something with its money pile.

“There is still no clarity on use of cash. Management indicates that it plans to retain its strong cash position for strategic opportunities in the future,” he said. “We believe Apple is going to encounter increasing pressure on using its cash for share buyback or dividend.”

Mr. Susanto initiated his Apple coverage with a “Buy” rating and $450 target price. Apple ic currently trading at $320.95, down 0.30 (-0.09%).