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Thursday, January 04, 2007, 08:00 am PT (11:00 am ET)

Apple shares up 2 percent following JMP Securities report

Shares of Apple Computer rose 2 percent on Thursday, helped by a research note from JMP Securities that said the company is "looking strong" ahead of next week's Macworld Expo in San Francisco.

In a note to clients, analyst Ingrid Ebeling recalled a comment made by Apple chief executive Steve Jobs this past October in which he said 2007 "is likely to be one of the most exciting new product years in Apple's history."

"We believe that Apple is on its way to become not just an iPod and Mac company but the next consumer electronics company targeting the digital lifestyle," Ebeling told clients.

The analyst said some of the new product possibilities at Macworld include iPods with larger video screens and possibly Bluetooth capabilities, both of which were originally hoped for during product announcements made in September 2006.

"The highly anticipated 'iPhone' is also expected sometime in 2007, and although we would be surprised to hear it would be available during MacWorld, we hope to hear some definitive product details from the company," she said.

Additionally, Ebeling said she is hearing "a little buzz" of an ultra-thin MacBook and expects to hear more details about iTV and previously unannounced features in the company's forthcoming Leopard operating system release.

For Apple's fiscal 2008, the analyst expects Apple to report earnings of $3.18 per share on sales of $27.1 billion.

"Our revenue estimates assume that Apple’s Mac business will grow to approximately 3 percent of the worldwide market (as estimated by IDC), or 7.9 million units, with revenue of $10.1 billion, up 9.1 percent over fiscal 2007," she wrote. "We are assuming total iPod sales of 61.3 million units, which assumes a 37 percent share of the worldwide market (as estimated by IDC) with revenue of $10.2 billion, up 7.3 percent over fiscal 2007."

Ebeling also raised her price target on Apple shares to $94 from $84, maintaining a "Strong Buy" rating on the stock.

Just before noon, shares of the Cupertino-based company were trading up $1.68 or 2 percent to $85.48 on the Nasdaq stock market.