Prudential Raises Apple Estimates

It seems that strong Mac sales are expected in the near future. Prudential has raised the quarterly profit estimates for Apple Inc. Apple shares are now up $1.51 (1.75 percent), to a value of $87.41. This helped Apple shares tick higher early Wednesday.

Prudential has estimated for the March quarter earnings of 68 cents per share. Their previous estimation was 4 cents lower, 64 cents a share. Wall Street's consensus target stands at 61 cents a share, 7 cents lower than Prudential estimates.

Prudential says that seasonal weakness in the iPod music player is being more than offset by stronger Mac sales and higher margins.

Shares of Apple were recently up 0.2% to $86.10. That is very little, considering the high expectations for Apple stock. Jim Cramer from RealMoney thinks we might be witnessing the "long-awaited breakout of Apple". He says Apple stock (AAPL - Cramer's Take - Stockpickr) is perhaps the most disappointing of 2007, with the exception of Google.

This is explainable with the announcement of the iPhone, in which Apple has invested a lot. There's a general belief that the iPhone will be a failure, not because it's not a well-developed and full-featured device, but because of its price-tag that's somewhat unreasonably high.

The "lid" the iPhone has put on Apple may be "sliding off", says the expert. And it's all thanks to the "power of Steve Jobs". He says Jobs owns a whole industry with the iTunes and he's getting huge media attention, and the Apple company along with him. Apple is also launching the Apple TV, which is said to be a success, so this should be kept in mind as well.

Jim Cramer thinks it's a mystery "how darned cheap it is vs. its growth rate". "Apple sells at 26 times next year's earnings estimate, with a 20%-plus growth rate". He thinks shares will continue to steadily go up mainly because of Apple's media marketing and because their products are "fashionable". Looks like the only way for Apple is up so don't sell your shares just yet...