UBS Raises AAPL Target Following Q3 Earnings Report

UBS analyst Maynard Um raised is 12-month target price for Apple's stock from US$141 up to $160 following the company's record breaking third quarter results. Apple reported $8.34 billion in revenue, up 11.7 percent compared to the same quarter last year, and Mac sales rose year-over-year, too.

"Apple's fiscal 3Q09 results were ahead of expectations, with both revenues and EPS ($8.33b/$1.35) beating UBS [estimates] ($8.09b/$1.20) and consensus ($8.2b/$1.17)," Mr. Um said. "Relative to our expectations, better than expected Mac sales (both desktops and notebooks) were the main drivers of GAAP revenue upside, while better iPhone units also helped non-GAAP revenue upside."

Apple shipped some 2.6 million Macs during the quarter, up four percent compared to the same quarter last year, and iPhone sales hit 5.2 million units, making for a 62 percent jump year-over-year. While Mac and iPhone sales were up, however, iPod sales dipped seven percent to 10.2 million units.

Looking forward, Mr. Um sees Apple's current product line up as a positive for the company's current quarter. "Although our concerns regarding the broader economy remain, a full quarter of MacBook Pro refreshes, international 3GS expansion, and continued sales of the more attractively priced iPhone 3G should help the Sept quarter," he said.

He added that Apple's gross margin guidance of 34 percent for the quarter could prove conservative, but less conservative than Apple's guidance for previous quarters.

Mr. Um is maintaining his "Neutral" rating for Apple's stock, but raised the target price from $141 up to $160. Apple is currently trading at $157.27, up 5.76 (3.80%).