Oppenheimer Positive On Apple (APPL)

Oppenheimer & Co. is positive on Apple Inc. AAPL, despite the rest of the market being wary about it. It's raised its price target to $385 from $345, and kept its Outperform rating. In a note sent to clients, Oppenheimer & Co. writes, "Why does the market dislike Apple? It typically grants companies with 70% EPS growth and plenty of runway a premium valuation. Apple is valued at 14x (ex-cash)—like the S&P. Some think Apple's market cap is the problem, but that's improbable (see our note of 10/19/10). More likely: with Android gaining momentum, investors are secretly worried about the sustainability of the iPhone's all-important price premium. If so, the more lasting consequence of an Apple-Verizon deal won't be the number of incremental iPhones sold, but that the scale of competition between iPhone and Android could tip sharply in Apple's favor. If so, Apple's earnings won't just rise from the additional Verizon units—they'll finally get some respect." Shares of AAPL are up $6.91 in early Monday trading to $329.47, a gain of 2.1%.