Wednesday, January 11, 2006, 10:00 am
UBS raises Apple price target to $100
On the heels of Apple's announcement that it sold 14 million iPods and achieved revenues of $5.7B last quarter, UBS Investment Research on Wednesday raised estimates and increased its target price on the company's shares to $100."While expectations ran high heading into this keynote in terms of product possibilities, we believe Apples performance in 1Q06 far outweighs any product announcements made (or not made) at the event and should drive momentum in shares," analyst Ben Reitzes wrote in a research note sent to clients.
"We are excited about the new Intel Macs and other software products announced at Macworld and believe that Apple continues to innovate and is set to announce several new products over 2006 -- including a new media server, an Apple branded cell phone and additional media content," Reitzes added.
The analyst also noted that some "widely anticipated" products were not announced at the show, but says he is not concerned.
"While no new iBook was introduced, it was offset by an iMac announcement and we believe an iBook is likely coming within a quarter or two anyway," Reitzes wrote. "We had discussed a media hub, but the new Macs are so powerful -- they are already hubs -- and we continue to believe a hub should be coming later this year with Intels Viiv."
The analyst said he continues to believe a new video download service and new iPod shuffle will also appear soon.
Given prospects for higher iPod sales and the positive impact on accessories, downloads, and more, UBS said it is raising estimates on Apple through fiscal year 2007.
For 2006, the firm raised its earnings-per-share (EPS) estimate to $2.33 from $2.10 based on 55-percent year-over-year revenue growth to $21.5B. For 2007, UBS estimates Apple to earn $2.80 a share based on 18-percent revenue growth to $25.8B.
The firm maintains a 'Buy' rating on Apple stock.
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Wow-- two forcasts for $100. I am loving this. If this keeps up, I will come out of grad school with more money than when I went in!