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Apple: Oppenheimer Boosts Target To $570; Raises Estimates

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Oppenheimer analyst Ittai Kidron this morning repeated his Outperform rating on Apple, while boosting his target price on the stock to $570 from $510. Kidron lifted his FY 2012 profit forecast for the company based on higher expectations for sales of both iPads and iPhones.

"Our iPhone checks suggest only a small post-holiday slowdown in iPhone 4S demand," he writes in a research note. "iPad demand has fallen more post-holiday, although we believe this in part reflects the expectation of a new iPad 3 announcement (likely updates include an upgraded display and faster processor). We expect the iPad 2 to step down to a lower price point expanding Apple's reach to lower priced tablet tiers. There's no change to our thesis - we're bullish on more iPhone and iPad expansion and potential newmarkets, particularly smart-TV."

Kidron boosts his March quarter iPhone sales forecast to 31 million units from 29 million; for iPads he now sees sales of 11 million units, up from 10 million.

The analyst notes that the iPhone 4S is "consistently the most sought after phone at all three carriers in the U.S. based on our store checks." And he adds that international demand "also looks good with ample room to expand, particularly in China."

As for the iPad, he notes that previous reports suggest there will be a March 7 iPad 3 introduction, with shipments soon after that. He also points to recent Wall Street Journal reports that the company is testing an iPad with an 8-inch screen.

For FY 2012, Kidron now sees profits of $45.78 a share, up from $45.14; for FY 2013, he sees $52.38 a share.

The bottom line: he sees multiple potential catalysts for the stock, including expanded iPhone and iPad penetration, a potential dividend and entry into the smart-TV market.

AAPL this morning is up 85 cents, or 0.2%, to $503.06.