Goldman Sachs analyst David Bailey this morning raised his target price on Apple (AAPL) to $185 from $175, asserting that strong Mac sales and a better product mix should offset sluggish iPhone and iPod sales and allow the company to report March quarter results “strong enough to satisfy the Street.” With the 3G iPhone launch an estimated two months away, he advises buying the stock here.
Bailey raised his March quarter EPS estimate to $1.09 from $1.02, and above the Street at $1.06, to reflect better gross margin from component cost declines and “a higher-end skew within each product line.” He expects gross margin at 34.7%, flat with the December quarter. The company is due to report results on Wednesday.
He raised his June quarter estimate to $1.12, from $1.05, above the Street at $1.10.
Bailey sees March quarter unit sales of 2.1 million Macs; he sees 1.4 million iPhones. He sees calendar 2008 sales of 11 million iPhones, ahead of the company’s much-publicized 10 million unit estimate.
Barron's
