Analysts laud Apple after blowout quarter

Apple shares have already risen more than 20 percent this year, helped by the launch of the iPad tablet in April and strong sales of its Mac computers and iPhones.

Apple's market capitalization stands at roughly $234 billion, second only to Microsoft Corp's $275 billion among U.S. technology companies.

BofA Merrill Lynch analyst Scott Craig said Apple's valuation is compelling, particularly based on the growth potential for its Mac and iPhone segments. These should outweigh the near term slowdown in iPod units, he added.

The analyst raised his price target on the stock to $300 from $260 and maintained his buy rating.

Goldman Sachs analyst David Bailey raised his price target on the stock to $270 from $240, but maintained a neutral rating, saying he considers the stock to be fairly valued.

The iPad has sold more than 500,000 units of its Wi-Fi model in the United States, in the week after its April 3 launch. The high-speed mobile version of the iPad will hit store shelves on April 30, the company said in a statement on Tuesday.

Citigroup analyst Richard Gardner said the iPad should begin to contribute to revenue from the second calendar quarter, followed by new version of iPhone in July, a new iPod in September, and perhaps an iPhone on Verizon's network in time for the holiday season.

Out of 43 analysts surveyed by Thomson Reuters StarMine, 37 rate Apple either a buy or a strong buy. Four rate the stock a hold, while two rate it either sell or strong sell.

INTERNATIONAL EXPANSION TO DRIVE SALES

Deutsche Bank raised its price target to $350 from $325 and its iPhone estimates to 41 million from 37.8 million units in 2010 and to 50 million from 46 million for 2011.

Apple sold 8.75 million iPhones in the March quarter -- more than double the figure of a year earlier and way above estimates -- driven by international demand for the smartphone, some of it due to the addition of new carriers in key overseas markets.

Broadpoint AmTech analyst Brian Marshall said the company has penetrated only 1.5 percent of the total subscriber base of its more than 150 international carrier partners.

The internationally opportunity could essentially double about eight quarters from now, he added.

OUTLOOK CONSERVATIVE YET AGAIN

On Tuesday, Apple projected revenue of $13 billion to $13.4 billion in the June quarter and earnings-per-share between $2.28 and $2.39.

Apple, which is known to provide conservative outlooks, forecast margins to decline to 36 percent for the current quarter from the strong 41.7 percent number recorded in the March quarter.

Citigroup's Gardner expects a more modest decline in gross margins.

Apple's ongoing shift to aggressive pricing is expected to maximize the company's revenue opportunity across all product segments, notably in the nascent tablet segment where it will enjoy a clear first mover advantage with iPad, Thomas Weisel said.

Shares of Apple rose 5.6 percent to $258.25 on the Nasdaq Wednesday, after touching an all-time high of $260.25 earlier in the session.

(Additional reporting by Mary Meyase in Bangalore and Gabriel Madway in San Francisco; Editing by Maju Samuel and Derek Caney)