UBS maintains ‘buy’ rating on Apple shares with price target of $90 on strong Mac demand

“UBS analyst Ben Reitzes today predicted sequentially lower iPod sales for Apple in the third quarter of this year, but expects new iPods next quarter and noted that MacBook demand is solid. ‘To reflect checks that indicate more interest for new MacBooks and solid education buying, we are raising our 3Q06 estimate for Mac units to 1.32 million units (was 1.24 million) and our FY06 unit estimate to 5.1 million (was 5.0 million),’ Reitzes wrote in a research note obtained by MacNN. ‘We now estimate iPod unit sales of 7.8 million for 3Q06 (was 8.4 million) reflecting year over year growth of 27 percent (-8 percent quarter over quarter) and FY06 unit sales of 39.8 million (was 40.9 million).’ UBS is maintaining a ‘buy’ rating for Apple shares with a price target of $90, hovering above its peers due to faster growth and higher margins,” MacNN reports.

“UBS has noted a shift in consumer interest toward Macs and away from iPod display counters at Apple retail locations. Mac displays appear ‘jammed’ with customers, while iPod displays are less frequented than previous quarters, according to the company,” MacNN reports. ‘While we believe increased focus on Macs should drive solid near term results, we also believe increased interest in Macs should lead to longer term PC market share gains, which we believe can provide significant top line benefits and earnings power,” Reitzes added.”

Full article with more juicy details here.

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  1. Likely two consecutive quarters now of negative iPod sales growth if this prediction comes true. 21% year on year growth would also be the lowest ever. It would be almost half the lowest ever previous year on year growth of 39%.

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