Here’s Why This Analyst Raised the Price Target on Apple

blue apple building modernWill Apple’s (NASDAQ:AAPL) September quarter surpass most analysts’ expectations? Mizuho Securities analyst Abhey Lamba recently raised his price target on Apple stock from $520 to $550 due to higher-than-expected iPhone shipments in the final quarter of fiscal year 2013, reports Benzinga.

“We expect the company’s outlook to indicate significant acceleration in iPhones, which would imply sequential improvement in margins,” wrote Lamba via Benzinga. Based on this expectation, Lamba estimated that Apple’s fourth quarter fiscal year 2013 revenues will be in the $37 to $38 billion range, which is higher than the consensus estimate of $36.8 billion. The analyst also estimated a September quarter EPS range of $8.05 to $8.25, which is higher than the consensus estimate of $7.89.

Lamba also noted the positive affect of Apple’s recently revised earnings guidance. “Given management’s recent commentary and our expectations that revenue outperformance will be led by iPhones, we expect gross margin to end up slightly above the high end of management’s outlook of 36-37 percent,” wrote the analyst.

Soon after Apple revealed its record-breaking iPhone weekend sales numbers, the company filed an 8-K form with the Securities and Exchange Commission that stated, “Apple expects total company revenue for the fourth fiscal quarter to be near the high end of the previously provided range of $34 billion to $37 billion, and expects gross margin to be near the high end of the previously provided range of 36 percent to 37 percent.” However, Lamba believes Apple may even surpass its own earnings guidance.

The Mizuho Securities analyst also offered his estimates for Apple’s December quarter. Lamba estimated revenues in the range of $55 to $57 billion and EPS in the range of $14 to $14.35 for the first quarter of fiscal year 2014. Apple is scheduled to announce its September quarter earnings on October 28. Here’s how Apple has traded over the past five trading sessions.


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