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Apple announced its best third-quarter results in eight years on Wednesday night – and investors welcomed the news, adding $3.35 to its share price in yesterdays trading.
Apple stock closed at $32.93 last night, up 11.33 per cent. The upward trend held on the after-hours market as analysts waxed positive
on the company's fortunes. Trading in the company's stock was well above the average, with 31.6 million traded, as opposed to the average daily turnover of 6.1 million share trades.
Responding to Apple's better-than-anticipated income and revenue, analysts across the board upgraded their rating on Apple stock, despite the company's public admission of continued problems in G5 processor supplies.
First Albany upgraded Apple to a 'Buy' rating from 'Neutral'. Analyst Joel Wagonfeld said the company: "Outperformed on better-than-expected results in a number of its core CPU businesses, including sales of Macintosh computers."
He raised his fiscal 2005 estimates to 95 cents earnings per share (EPS) on $9.517 billion revenues, up from 88 cents EPS on $9.106 billion. Target share price becomes $35, Business Week reports.
Needham & Co analyst Charles Wolf said: "Although music suite sales were expectedly strong, the upside surprise was due chiefly to stronger than anticipated sales of iBooks and Powerbooks."
He added that Apple's music initiative is beginning to bear fruit: "Apple's music suite, consisting of the iPod and iTunes Music Store, is emerging as a Trojan horse that's beginning to fuel a migration of Windows users to the Mac platform." That company repeated its previous 'Buy' assessment on Apple stock, with a $36 target price.
Shannon Cross of Cross Research told SmartMoney.com: "The important thing about Apple is, even though it has a small share of the computer market at less than 3 per cent, it actually makes money on its boxes".
AFX reports similar lyricism from Bear Stearns analyst Andrew Neff. Neff raised his rating on Apple to "outperform" from "peer perform." The upgrade reflects more consistent growth and execution on Apple's part", Neff said, setting a target price of $36.50.
Analysts at Fulcrum Global Partners upgraded their assessment of Apple from 'neutral' to 'buy'.
More lacklustre than most, analyst Steve Fortuna of Prudential Financial reiterated his 'neutral weight' rating but raised his estimates for the company. The target price climbed from $25 to $27.