Apple shares climb as release of new iPad nears

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NEW YORK (AP) ? Shares of Apple Inc. were up nearly 4 percent Wednesday afternoon, to a 52-week high, as two analysts raised their estimates of the tech giant’s earnings and sales on strong demand for iPhones and iPads.

THE SPARK: Analysts from Morgan Stanley and Canaccord Genuity said despite Apple’s incredible run over the past few months, the stock can go even higher. They raised their 12-month price targets for the shares to above $700 while the shares traded for less than $600.

THE BIG PICTURE: Apple shares have been on a four-month run, and it has continued this week as anticipation grows for release of a new iPad with a sharper display, faster processor, and starting price of $499.

Analysts have weighed in with bullish estimates of how many of the tablets will be sold by Cupertino, Calif.-based Apple.

Growing sales of iPhones and iPads have helped Apple build the largest cash pile in corporate America, $97.6 billion, nearly twice as large as that of runner-up Microsoft Corp.

THE ANALYSIS: Morgan Stanley analyst Katy Huberty predicted much stronger revenue from sales of iPads and iPhones in 2012 than she had previously forecast, and she raised her target for the stock’s price to $720 from $515.

“Investors still underestimate the potential earnings upside at Apple,” she wrote in a note to clients.

Huberty said Apple earnings could rise as more businesses use tablet computers, and with introduction of an iPhone capable of connecting to wireless networks using the new LTE or “long-term evolution” technology that allows faster downloads. Another boost, she said, could be growing sales of iPhones and other products in emerging markets, driven by new carriers such as China Mobile.

The Morgan Stanley analyst raised her earnings forecast to $50 per share from $42.95 and predicted revenue of $159.84 billion, up 10 percent from her earlier estimate of $175.39 billion.

Canaccord Genuity analyst Mike Walkley kept a “Buy” rating on Apple and raised his target for the stock’s price to $710 from $665.

Walkley believes Apple is getting very strong, even record-setting, pre-orders for iPads based on shipping times for new orders, although Apple does not disclose how many units are being set aside for pre-orders. Walkley raised his estimate of iPad shipments for 2012 and 2013.

The Canaccord analyst raised his estimate of 2012 earnings per share to $44.58 from $42.81, and his revenue forecast to $163 billion from $157.6 billion.

SHARE ACTION: The shares traded at $589.02 on Wednesday afternoon, up $20.92 or 3.7 percent. They were as high as $594.73 earlier in the day.

Wednesday’s gain continued a rally that began in December, with the shares below $400. Going into Wednesday’s session, they had gained 40 percent in 2012.