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Apple May Climb Above $700 As New iPad Sales Begin, Analysts Say

Wednesday, 14 March 2012 01:22 PM

Apple Inc., getting a boost from anticipation of the new iPad, rose to a record today and may climb more than 20 percent to $700, according to analysts who raised their price targets for the stock.

At least four analysts, including Katy Huberty at Morgan Stanley in New York, have increased price targets to $700 or higher in the last two weeks. That’s 23 percent more than yesterday’s closing price of $568.10. The stock had gained 40 percent this year before today.

More are likely to boost targets as they quantify the market share of the new iPad, said Michael Walkley, an analyst at Canaccord Genuity, who raised his target to $710 yesterday. The average price target of 43 analysts surveyed by Bloomberg is $606, which could mean updates are lagging behind, he said.

“As they do their checks in the quarter and stronger numbers come through, it leads to better earnings power than we were seeing even six weeks ago,” Walkley said in an interview. “Some analysts are behind the curve on estimates.”

The new iPad, set to go on sale March 16, has a sharper screen and faster chip as Apple Chief Executive Officer Tim Cook seeks to widen the company’s lead in tablets over Amazon.com Inc., Microsoft Corp. and Google Inc. Slashing the price of the older iPad by $100 also helps cut into competition, said Huberty, who raised her price target to $720 yesterday.

Huberty also cited the company’s expansion in emerging markets such as China and Brazil and a new TV product as reasons to lift her price target.

“Apple’s earnings power is potentially far greater than investors believe and our prior bull case model suggested,” Huberty said in a note to investors.

Apple, based in Cupertino, California, rose 2.4 percent to $581.44 at 11:51 a.m. in New York. Earlier, the shares advanced to a record intraday high of $583.97.

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Wednesday, 14 March 2012 01:22 PM
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