NEW YORK (
) -- The all-time highs keep coming for shares of
ahead of the company's fiscal fourth-quarter report on Monday, and Wall Street's bullishness is more than keeping up the pace.
Of the 53 analysts currently covering the company, 49 have either strong buy (27) or buy (22) ratings, according to
. And while the stock has now risen in nine straight sessions beginning on Oct. 4, including a 4% pop on Friday, the median 12-month price target on the shares is $350, implying upside of 11% from here.
So it's fair to say there's not a whole lot of concern out there right now that the stock has come too far, too fast.
BGC Partners issued a note previewing Apple's report late Friday that was illustrative of the euphoria that continues to surround the company. While the firm cautioned that earnings might not be as spectacular as they have been in past quarters, it suggests investors view any weakness as a buying opportunity.
"Given the lofty expectations for results tied to Apple's history of exceeding expectations -- shares may be weak on the earnings news if results are inline or even modestly exceed estimates," the firm said. "We point out that Apple issued what appeared to us as a robust guidance for this quarter -- a deviation from its historical pattern of providing a conservative outlook."
BGC also thinks the company's decision to provide free iPhone 4 cases to combat an antenna problem could reduce earnings by 10 cents a share in the quarter, and noted the iPhone "was essentially sold-out" for the whole quarter with wait times of weeks, rather than days. So there may be a bit more risk in the number than there has been in previous quarters, but it wasn't enough to bring the firm off its buy rating.
The consensus view currently calls for Apple to report a profit of $4.08 a share on revenue of $18.9 billion. BGC is expecting earnings of $4.09 a share on revenue of $19.25 billion.
Beyond what happens on Monday, the firm thinks the long-term investment thesis on Apple remains bright because of the so-called halo effect the company's iPhone and iPad products have on its other businesses.
"As more consumers get introduced to Apple via the iPhone, we maintain there is a virtuous circle that is driving sales of Apple's desktop and laptop Macintosh products," BGC said. "Recent data from Gartner shows Apple with 14% unit growth in the September quarter, and an impressive 10.4% computer market share in the United States."
BGC expects this trend to continue for at least the next several quarters, and believes Apple will report another record for Macintosh sales in the September quarter, possibly breaking the $5 billion mark vs. a total of $4.4 billion in the June quarter.
Amazingly, there's also a valuation case to be made for giving Apple shares a look. The stock may be up 43% year-to-date, but its forward price-to-earnings multiple is only at 17.5X based on a consensus expectation for a profit of $18.11 a share in fiscal 2011.
That's high in comparison to its rivals on the PC side of the aisle, such as
at 10X and
at 8.4X, but BGC thinks the company's growth prospects back it up.
"We continue to suggest that shares of Apple represent an attractive blend of growth at a reasonable valuation," the firm said. "Apple shares are trading at 17x our FY2011 estimate of $17.78, a discount to our 27% revenue growth and 23% net income estimate over the same period."
Even the technicals look pretty good as the stock has made decisive but gradual moves higher. At Friday's close of $314.74, the stock is trading 14% above its 50-day moving average of $276.45, and 21% above its 200-day moving average of $259.71.
Apple has beat Wall Street's consensus expectations in the last eight quarters by an average of 29%, so it's a better-than-good bet to deliver a fair amount of upside after Monday's closing bell.
What's more intriguing, however, is that the company's best may be yet to come. Holiday shopping season is right around corner and the company's biggest beat of the past two years came in last year's fiscal first quarter ended in December when its profit of $3.67 a share came in 76% ahead of the average analysts' view of $2.09.
Written by Michael Baron in New York.
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