Apple: Wedbush Adds To ‘Best Ideas,’ Cuts Nokia Estimates

Wedbush Securities’s Scott Sutherland today reiterates an Outperform rating on shares of Apple (AAPL) and adds it to the Best Ideas list, while raising his price target to $530 from $510, after raising his estimates for the iPhone and the iPad and predicting continued dominance by Apple in the “connected devices” market.

Sutherland also reiterated a Neutral rating on Nokia (NOK) and cut his price target to $6 from $7, as part of a broader review of the wireless market that prompted him to cut estimates for the phone giant.

Based on his “checks,” Sutherland now sees Apple shipping 21 million iPhones in the fiscal Q4 ending this month, up from a prior 20 million estimate. He sees the company shipping 8.8 million iPad units, up from his prior 6 million estimate.

Sutherland also raised his fiscal Q1 estimates, with 26 million iPhone units, up from 23 million previously.

Sutherland writes that demand for Apple’s iPhone 4 “remains strong,” while there is “a large opportunity to increase distribution” of the devices, especially in China. He notes Apple added 42 carriers in the last quarter, but is still below the 600 carriers he counts for Research in Motion (RIMM).

Sutherland expects the newest iPhone to debut in October, along with “an iPhone targeting emerging markets,” to be followed by an LTE iPhone in 2012 with a “materially improved user interface,” without explaining any further. The iPad’s competitors, moreover, will continue to struggle, he writes.

Sutherland raised his estimates for fiscal 2012 to $136 billion in revenue and $32.51 per share in EPS, up from $126.8 billion and $29.13 per share.

For Nokia, Sutherland cut his estimate for this year to $54.3 billion in revenue from $54.8 billion, while leaving EPS unchanged at 32 cents per share. He sees Nokia overly exposed to the “feature phone” market, which are on a declining path.

He also sees the company’s smartphone shipments hit by its continued transition to new devices based on Microsoft’s (MSFT) “Windows Phone 7.”

There are some bright spots, however: The Windows devices may “see good market acceptance over time.” And Nokia may upgrade its feature phones, which “could make them look and feel more like low-end smartphones,” he thinks.

Apple shares today are notching new all-time highs, currently up $7.87, or 2%, at $419.50, while Nokia shares are down 2 cents at $5.85.