( Reuters ) - The stock of Apple Inc hit a new high on Monday after Citigroup raised its share-price target and earnings estimates for the maker of iPod music players, iMac computers and iPhones.
The stock rose as much as $5.77 to $149.85 after Citigroup lifted the target to $185 from $160, citing surprisingly strong computer sales, falling component prices and Apple's recent price cut for the iPhone, the company's first cell phone.
The previous record for Apple shares was $148.92, reached during the trading session on July 27 of this year.
Citigroup analyst Richard Gardner said in a note to clients that he had raised his earnings-per-share estimates for Apple to $4.76 from $4.30 for 2008, and to $6.35 from $5.55 for 2009. He cited falling prices of storage components used in Apple music players for improving profit margins at Apple.
Gardner also raised his estimate for Apple computer sales to 2.17 million from 2 million "on stronger than expected iMac momentum," after the company announced new versions of the computer in August.
Citigroup's new $185 price target implies a valuation of about 39 times Gardner's estimate for 2008 earnings per share. Analysts' average price target of $168.22 implies a valuation of 38 times their average 2008 earnings forecast of $4.42 per share, according to data from Reuters Estimates.
The highest analyst price target for the stock is $211, according to Reuters Estimates.
Pacific Crest analyst Andy Hargreaves also said he had high expectations for Apple's growth prospects following its recent revamp of its full iPod music player line up, including a version with connectivity to short-range wireless networks.
"The product cycle for the company is the strongest it's been in several years," said Hargreaves, who owns a small number of Apple shares and rates the stock outperform.