Apple (AAPL) Estimates Lifted, Price Target Raised to $110 at BMO Capital

BMO Capital analyst Keith Bachman raised estimate and his price target on Outperform-rated Apple (NASDAQ: AAPL) to $110.00 (from $106.00) amid the iPhone 6/6+ launch.

Bachman is making three estimate changes in FY2015: 1) raising our iPhone estimate by approximately 10.6 million units to 189 million units and raising our assumed iPhone ASPs from $633 to $637; 2) adding a Watch sales estimate of 12 million units (or 20 million in CY2015); and 3) lowering our iPad estimate by 9.5 million units.

"For iPhones, we remain unclear about Apple's ability to sell the iPhone 6 and 6 Plus in China, particularly in the December quarter, and we think China could affect the December quarter by more than 10 million units," the analyst said. "If iPhones are available for sale for the full December quarter, then we are likely conservative with our 58 million iPhone unit estimate. We do not think Apple Pay will materially affect revenues in FY2015, and even in FY2016, we think payments is more about selling iPhones than adding meaningful revs/EPS. Finally, we think our FY2015 gross margin assumption, and more specifically, around iPhone gross margins, could prove conservative.

The firm raised FY2015 EPS estimate from $7.34 to $7.62, compared with consensus of $7.20.

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 $97.87 yesterday.

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