“We are upgrading Apple Inc. (AAPL) to Outperform from Neutral, as we believe Apple has further room for expansion. Apple has experienced tremendous growth, driven by the success of its iPhones and increased Mac shipments,” Zacks Equity Research reports.
“We expect the iPhone-driven momentum to continue, as the company’s product generates the highest customer satisfaction in the industry. In our opinion, this is the key to long-term growth and continued appreciation of the stock, given the large addressable market,” Zacks reports.
“We believe the company will continue to post solid results due to the resurgence of its Mac portable systems, including MacBook Air, Mac Pro and the new Snow Leopard. The company revamped its line of iMac desktops and MacBook laptop computers, as well as increased sales of iPods, including the new iPod Shuffle, iPhone 3G, iPhone OS 3.0 (beta release), iTunes Movie Rentals and the successful launch of the iPhone 3GS,” Zacks reports.
“Apple has a strong balance sheet with zero debt and $34.0 billion cash, short-term investments and long-term mark etable securities as of September 2009 versus $31.1 billion as of June 2009,” Zacks reports. “Year to date, Apple’s share price has more than doubled. Apple’s valuation premium is justified, given the company’s various positive attributes and track record in earnings growth, and leaves room for further upside from the current levels.”
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