“Banc of America Securities upgraded Apple Computer to ‘buy’ from ‘neutral’ and raised the target price to $85 from $75. ‘The focus of our more-positive view is CPU growth from both the demand and supply side,’ Banc of America said. ‘We believe that Apple can capture 3.5% or more of its iPod installed base, driving 16% CPU growth in 2006, versus our previous estimate of 10%.’ The research firm said each 1% share point is equal to 5 cents in 2006 earnings per share. Banc of America raised its 2005 and 2006 earnings-per-share estimates on Apple to $1.87 and $2.16, respectively, from $1.64 and $1.95. ‘Despite increased revenue from lower average-selling-price products like Mac mini and iPod, Apple continues to have strong operating leverage,’ Banc of America said, adding that the Mac mini should help the company expand customer reach. Banc of America also conducted a survey that indicates a strong brand appeal in converting from Windows systems to Macs ‘based on better media capabilities and virus protection,'” Forbes reports.
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