Apple (AAPL) Estimates, PT Raised at BMO Capital

BMO Capital analyst Keith Bachman reiterated an Outperform rating on Apple (NASDAQ: AAPL), raised estimates and raised his price target from $560 to $565. However, the firm thinks the June quarter estimates are too high.

Bachman is raising EPS estimates on Apple, driven by aggressive share buybacks. Apple repurchased approximately $14 billion worth of stock, and they assume that the share count declines by around 22 million, to 880 million shares in the March quarter. In addition, they assume total share buybacks of about $35 billion in FY2014 and FY2015, compared with $40 billion over the past 12 months.

The firm is raising their March quarter EPS estimate to $10.23 from $10.16 (consensus of $10.14). They are also raising FY2014 EPS estimate to $41.59 from $41.36 (consensus of $42.75) and FY2015 EPS estimate to $45.15 from $44.55 (consensus of $46.54).

On the June quarter, the firm thinks estimates, particularly revenues, are too high. For the June quarter, they project revenue of $36.6 billion vs. consensus of $38.6 billion.

Looking out longer-term, they see three catalysts: 1) large-screen iPhone, which we think is important for Apple’s pricing category; 2) a wearable category, for which we think the market is in the very early stages, and dependent on GUI/software and an integrated ecosystem, areas of Apple’s competitive advantage; and 3) more services, including—potentially—payments.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $538.79 yesterday.

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