Apple Inc (AAPL)

[roni]

From Forbes.com

Apple Is A 'Top Pick' Based On Continued IPod Momentum
Maya Roney, 01.11.06, 10:16 AM ET

Morgan Stanley research analyst Rebecca Runkle maintained an "overweight" rating and $90 price target on Apple Computer (nasdaq: AAPL - news - people ) and raised earnings estimates, dubbing Apple her "top pick" coming out of the MacWorld 2006 keynote yesterday.

"iPod momentum is stronger now than it’s ever been," wrote the analyst in a research note Wednesday.

"Apple’s system lineup is also stronger than it’s ever been — these two factors alone give us plenty of reason to stay long the stock despite the run it’s enjoyed over the last 15 plus months."

Runkle continues to believe Apple’s Mac transition to Intel (nasdaq: INTC - news - people ) could be largely complete by mid-year and that a specialized "digital living room solution" media server is still in the works for later this year.

"The evolution of the digital living room is one of our three major themes for 2006," said the analyst, "and monumental traction during [the] 2005 holiday combined with new product offerings further solidify Apple as the best positioned living-room play in our group."

To reflect new Mac product ramps, Runkle raised fiscal 2006 estimates to earnings of $2.03 per share on revenue of $20.8 billion from earnings of $1.89 per share on revenue of $19.6 billion.

Runkle said Apple's "monumental" holiday quarter for iPod and iTunes sales helped drive a $2 billion sequential increase in revenue and a $900 million upside versus her previous estimate.