Zacks Upgrades Apple to Buy, Raises Price Target to $422
Zacks has upgraded Apple (AAPL) to Buy from Neutral, as it expects the company to outperfom its peers this year. Zacks full analysis is available in this complimentary download from the Alacra Store.
Selected excerpts:
We are upgrading Apple to Outperform from Neutral, as we believe Apple has further room for expansion. We raise our target price to $422 from our previous price target of $354. Our price target represents a P/E multiple of 18.4x our fiscal 2011 earnings estimate, accurately reflecting the current outlook.
Apple s posted stellar first quarter 2011 results beating the Zacks Consensus Estimate. The outperformance was driven by strong iPhone, Mac and iPad sales. Over the last four quarters, Apple surpassed the Zacks Consensus Estimate by 21.3%. The outlook for Mac, iPad and iPhone remains robust, backed by domestic and international demand, boding well for Apple’s revenues and earnings. With a loyal customer base, international expansion, competitive pricing strategy and solid cash in hand, we remain positive on its long-term growth.
Moreover, we expect Apple to introduce new products this year to compete against new Android-based phones and tablet PCs. We are also positive on the addition of Verizon as a carrier that will help it double its customer base. Stronger than- expected iPhone and iPad sales will help Apple gain increasing smartphone market share. We expect the company to outperform its peers this year and thus we again raise our 2011 revenue and EPS estimates.
[Related research on Apple via Alacra Pulse: the median price target of analysts tracked by Alacra Pulse is $430. Canaccord Genuity last week raised its target price to $460 from $432.]
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