Apple: Hudson Square Boosts Price Target To Street High $500

You have to hand it to Hudson Square Research analyst Daniel Ernst. He thinks big.

This morning, Ernst raised his price target for Apple (AAPL) to $500, from $300, while repeating his Buy rating. That’s the highest target for the stock among Street analysts tracked by Thomson First Call.

“With the launch of the iPhone, the App Store, the iPad, and the relaunch of Apple TV, we estimate Apple�s total addressable market for hardware, content, and services expanded from roughly $400 billion to $1.5 trillion,” he writes in a research note this morning. “Apple�s Mac share has doubled over the last five years and we believe could double again. In a little over 3 years Apple has captured less than 3% of the mobile phone market by units, but by revenue Apple holds a ~14% share. The iPad is off to a strong start, and the product greatly expands Apple�s addressable market for content distribution. While the new Apple TV and iAd are still in the very early stages, we believe the opportunity is very strong.”

He raised his FY 2011 EPS forecast to $17.67, from $16.67.

At $500, the company would have a market cap of more than $450 billion.

Meanwhile, a number of other analysts weighed in on the stock this morning, with earnings due after the close on Monday.

• Piper Jaffray analyst Gene Munster this morning writes that September quarter results are likely to be in with the Street, but were constrained by iPhone and iPad supply shortages worldwide. “We believe the printed numbers for iPhone and iPad are less relevant than usual given the lack of supply and we expect the company to address these supply shortages on the earnings conference call,” he writes. “Bottom line: we believe over the next three months, investors will become increasingly more optimistic that the Street revenue growth in FY11 of 26% y/y is conservative given the size of Apple’s addressable markets combined with the company’s relatively small market share.”
• RBC analyst Mike Abramsky, on the other hand, thinks Apple will post a “big” Q4 beat; he’s now looking for revenue of $20.3 billion and profits of $4.48 a share, up from $19.7 billion and $4.15. HE sees the company selling 13.5 million iPhones in the quarter, with 5 million iPads, 3.7 million Macs and 9.4 million iPods. His FY 2011 forecast is now $19.27, up from $19.
• UBS analyst Maynard Um expects a solid Q4, and adds that the company could surprise with stronger guidance than the Street is expecting.

AAPL this morning is up $4.04, or 1.3%, to $306.35.