UBS Ups Apple Target Share Price to $415

Posted by at 12:40 pm on January 13, 2011

UBS analyst Maynard Um has raised his target price for Apple stock from $365 to $415, quoting several factors. Chief among these is the holiday season, as iPads, iPhones and iPods are said to have been some of the most gifted electronics. The new MacBook Air is also said to be showing “strong” sales, not only because of the holidays but because of lower prices than previous models commanded.

“Though we believe this would normally result in lower overall Mac gross mgn [margin],” Um writes, “potential warranty accrual reversals (90bps impact last qtr), component pricing tailwinds, & iPad cost improvements should more than offset mix shift.” The second-generation iPad may further harm Apple’s profit margins, he suggests, but it’s argued that this will be partly compensated for by the CDMA iPhone and the iPhone 5. Apple has used lower margins on the first-generation iPad to keep prices reasonable.

For Apple’s first fiscal quarter of 2011, Um is raising revenue and EPS estimates from $23.9 billion and $5.14 to $24.5 billion and $5.40. A FY2011 forecast has been bumped from $91.5 billion and $19.42 to $93.7 billion and $20.08. During the 2011 calendar year Apple is now expected to sell 69.4 million iPhones and 29.2 million iPads.

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