Analysts have raised estimates for Apple in spite of poor economic signs, mainly due to their confidence in the strong momentum from iPhone and iPod sales.
Analyst Shaw Wu of Kaufman Bros. has raised his estimates for Apple, which is tied to strong momentum from iPod and Snow Leopard sales, while Morgan Stanley analyst Kathryn Huberty and UBS analyst Maynard Um meanwhile elevated their predictions for Apple with confidence in iPhone sales and apps.
According to Wu, the new video-capable iPod nano is to be leading the way, while the new Touch, as cheap as $200, is described as strong, despite missing rumored additions. Games, meanwhile, are generating more interest in the Touch and iPhone than originally expected. Snow Leopard's $29 price is seen as a major driver in consumption of the new operation system.
Wu is raising iPod shipping estimates from 10.7 to 11 million units for the September quarter, and expecting a higher gross margin, jumping from 34.2 to 35.2% based on Snow Leopard sales. The analyst now expects $9.1 billion in revenue and $1.41 in EPS, up from $8.9 billion and $1.29; both sets of numbers are far ahead of Apple guidance, calling for between $8.7 and 8.9 billion in revenue and $1.18 and $1.23 in EPS.
Wu has also upgraded the 12-month price target for Apple from $184 to $214, following UBS analyst Maynard Um who switched his rating for Apple stock earlier this day from Neutral to Buy, and substantially raised his price target, pushing it from $170 to $265.
Um expects Apple to sell 36 million iPhones in the 2010 fiscal year, instead of 25.9 million. Pro forma revenue and EPS figures are predicted to be $51.6 billion and $11.08.
Morgan Stanley analyst Kathryn Huberty has meanwhile elevated her own predictions for 2010, calling for at least 41.7 million in iPhone sales, double those expected for 2009.
Huberty is now forecasting $45.3 billion in revenue for 2010, scratching an earlier number of $38.2 billion. The new accompanying EPS estimate is $10.50, 13% over Street consensus.