According to a note to clients this morning, Piper Jaffray analyst Gene Munster explains that the key question for Apple now is, are we seeing the company’s Earnings Per Share (EPS) upside or is this sustainable?
Munster believes this is not Apple’s peak EPS, as he believes that Apple is entering what will be the 3 strongest quarters in the company’s history with catalysts such as:
• iPhone in June
• New product in Jun/Sep (6G iPod, Mac tablet, or some other new consumer product)
• Continued Mac market share gains.
According to Munster, Apple has the lead position and is capitalizing in a shift in computer buying behavior. It is obvious consumers want computing devices that are focused on entertainment and creativity. To date, Apple have not seen any credible competitive threats in their core markets. Munster writes, “To date, we have not seen any credible competitive threats in Apple’s core markets (Zune is a flop in the MP3 space and Dell & HP have failed to deliver PCs that rival the Mac). We believe that in the coming quarters Apple will hold its massive lead in portable audio and grow share in the personal computer market.”
Munster maintained his “Outperform” rating on AAPL and raised his price target to $140 from $123.
One error: Zune isn’t a flop, it’s a plop.