UPDATE: Bank of America Raising Price Target On Apple

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Bank of America Merrill Lynch is out with a research report on Apple Inc.
AAPL
after it reported earnings last night. It is raising its price target to $515, and is keeping its Buy rating on shares. In a note to clients, Bank of America Merrill Lynch writes, "Apple reported EPS of $7.79, crushing our $6.25 estimate (Street $5.85), on better revenue (iPhone, iPad) and margins (gross margin slightly up Q/Q; leverage). Our EPS estimates will likely remain significantly above consensus. F4Q11 guidance is very conservative with sales of $25bn (-12% Q/Q), gross margin 38% (-370bps Q/Q), and EPS of $5.50 (our/Street prior $6.85/6.45; our new $7.90) – on average revenue/EPS increase Q/Q in F4Q by 20%/40%. Remain Buy on valuation, product trends, gross margin upside, and Street EPS revisions." Bank of America Merrill Lynch goes on to say, "We are raising our F2011 and F2012 EPS estimates to $28.53 and $34.75, from $25.93 and $31.80, on higher revenue and gross margin assumptions. See Figure 3. Our PO goes to $515 based on 13 times our C2012E adjusted NOPAT/share estimate of $35 plus $81 in net cash. Maintain Buy rating." Shares of AAPL are up $22.02 to $398.88 in pre-market trading.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsBank of America Merrill LynchComputer HardwareInformation Technology
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