Apple Analyst Raises Rating to Strong Buy

Today’s call is one on a compelling valuation ahead of the holiday spending trends with new iPhone and iPad offerings leading to more market share gains despite some recent slips and management changes made recently.

S&P Capital IQ sees the fundamental story unchanged and intact and Kessler believes that Apple could decide to allocate more capital toward dividends and buybacks.

It was just yesterday that we saw Kessler say, “We estimate sales growth of 25% for FY 13 (Sep.), after a 45% rise in FY 12, reflecting success with iPhones and iPads.We also see related continuing growth from downloads, as hardware sales enable and promote consumption of apps, music, movies and books. We see iMac shipments rising at an above-industry pace, but iPod units continuing to decline because of market saturation and AAPL’s already dominant market share.We project 15% revenue growth for FY 14.” Its Qualitative Risk Assessment was High.

Apple shares are still down about 0.4% at $541.00 against a 52-week range of $363.32 to $705.07.

JON C. OGG