Updated from 8:28 a.m. EDT to provide additional guidance comments in the fifth paragraph, and fresh stock price.NEW YORK ( TheStreet) -- The iPhone announcement may have been a big hit with consumers but Wall Street had its doubts. However, Apple ( AAPL) is getting a boost from Wall Street as prospects for the iPhone continue to astound. Jefferies analyst Peter Misek upgraded Apple shares to "buy" from "hold," raising his price target to $600 from $425, after noting that meeting with Apple's suppliers had a positive change in sentiment towards the Cupertino, Calif.-based Apple. He believes that suppliers became more lenient on price, which should boost Apple's gross margins. "Despite still seeing risk to CQ4 and FY13 revs, we now believe better GMs will allow Apple to skate by until iPhone 6 launches with its 4.8" screen," Misek wrote in a report. "We est ~50% of smartphone shipments have >4" screens and that iPhone 6 will catalyze a large upgrade cycle. The stock is attractive based on the attitude change, FY15 revs >+15%, and valuation." He raised his fiscal 2014 gross margin estimates to 39.8%, up from 36.3%, while noting that Wall Street estimates are at 37.4%. Apple's dominant position over its supply chain remains despite concerns that suppliers earlier in the year boasted Apple would "not be able to push them around anymore." Apple recently raised its fiscal fourth-quarter guidance as a result of selling the 9 million iPhones in their opening weekend. "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% to 37%," the company said in filing with the Securities and Exchange Commission. Despite the optimism, Misek noted his concerns for the calendar fourth-quarter, Apple's all-important holiday selling season. He believes that the iPhone 5c is seeing a build cut to a range of 15 million to 20 million units, down from an initial 30 million build. He expects Apple to earn $13.28 a share, below Wall Street estimates of $13.81. Conversely, Cantor Fitzgerald analyst Brian White, he of the $777 price target, believes that the "Apple Barometer," which he uses to track Apple and its suppliers, rose approximately 9% to 10% month over month, as the new iPhone 5s and iPhone 5c were released. "Keep in mind, Apple has traditionally launched the iPhone in June or July; however, this began to change in 2011 and thus historical comparisons for September can be skewed," White wrote in a note. "Additionally, the preliminary performance this September is well above the up 3% MoM in 2012."
Outside of the iPhone, the next event that Wall Street is going to pay attention to is the pending iPad refresh, reportedly set for later this month. Both White and Misek are positive on the pending refresh, with White noting that the iPad 5 "has the potential to be a significant iPad upgrade cycle." Speculation surrounding the tablet is that it will borrow some elements of the popular iPad mini, be lighter, and feature a thinner bezel. In addition to the 9.7-inch iPad getting a refresh, the iPad mini may also see an update. Pictures floating around the Internet show a gold iPad mini, borrowing the same color scheme as the iPhone 5s. In addition, the iPad mini is likely to get Retina Display technology to improve screen visibility, though nothing is confirmed. Apple shares were rising 1.6% to $490.91 in early trading Monday. -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia