NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) shares were higher in early Monday trading, following news one analyst raised his price target ahead of the company's third-quarter earnings tomorrow.
BMO Capital Markets analyst Keith Bachman raised his price target to $480 from $450, as he believes Apple has a chance of beating earnings estimates. He expects Apple to earn $7.98 per share, as a lower warranty expense could help June's gross margins by as much as 110 basis points, aiding earnings per share.
Analysts polled by Thomson Reuters are expecting Apple to earn $7.32 per share on $35.08 billion in revenue for the fiscal third-quarter.
As for guidance, Bachman is still unsure what Apple will deliver, given the company recently changed how it forecasts guidance for the upcoming quarter. "Though we have less history on the new guidance approach, we would expect Apple to guide September-quarter revenue to be flat q/q, or around $2 billion less than consensus estimates," Bachman wrote in the note. "We believe the variance between revenue guidance and existing consensus estimates will be less than in the past few quarters."Bachman also raised his calendar year 2014 estimates for the Cupertino, Calif.-based tech giant. He now expects Apple to earn $43.48 per share, up from a prior view of $42.27 per share. The consensus view from analysts surveyed by Thomson Reuters calls for Apple to deliver $43.13 per share in earnings in 2014. Shares of Apple were higher in pre-market trading, gaining 0.42% to $426.75. -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia