Analysts raise targets after Apple’s outstanding financials

At least eight brokerages have raised their price targets on Apple after the company’s latest blow-out quarterly profit and a forecast strong third-quarter revenue, reports “Reuters” (http://news.yahoo.com/s/nm/20100421/bs_nm/us_apple_research_analysts_2).

On Tuesday Apple announced financial results for its fiscal 2010 second quarter that ended March 27, 2010. The company posted revenue of US$13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share.

These results compare to revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent, up from 39.9 % in the year-ago quarter. International sales accounted for 58% of the quarter’s revenue.

Apple sold 2.94 million Macs during the quarter, representing a 33% unit increase over the year-ago quarter. The company sold 8.75 million iPhones in the quarter, representing 131% unit growth over the year-ago quarter. Apple sold 10.89 million iPods during the quarter, representing a 1% unit decline from the year-ago quarter.

Apple shares, which have risen 16% this year, were up about 6% at US$258.50 in pre-market trade. They closed at $244.59 Tuesday on Nasdaq, notes “Reuters.”

“Altogether, Apple is executing exceptionally well across all product segments and geographies and has given us increased confidence in the company’s long-term growth outlook,” Thomas Weisel Partners said.

Bank of America Merrill Lynch analyst Scott Craig said Apple’s valuation is compelling, particularly based on the growth potential for its Mac and iPhone segments. 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.

Deutsche Bank, which raised its price target to $350 from $325, said robust iPhone and Mac demand, international expansion and new product cycles should drive continued momentum.

Bill Kreher, an analyst with Edward Jones & Co. in St. Louis advises investors to buy the shares. “Apple is demonstrating they are clearly king of the mountain in technology land,” he says.