Apple, Inc. (AAPL)

Apple, Inc. (AAPL - Analyst Report) has experienced tremendous growth, driven by the success of its iPhone and increased Mac shipments. The company reported strong fiscal 2009 results with higher revenue (12.5% year over year) and earnings (17.4% year over year) growth despite the recession. The results beat the Zacks Consensus Estimate and the company's own guidance.

The company is currently benefiting from a positive mix shift to the higher-margin iPhone/iPod business from its traditional MP3 players. The Macintosh product continues to gain market share, with significant gains in portables, music players and smart phones.

Year-to-date, Apple share prices have more than doubled. Apple's valuation premium is justified, given the company's positive attributes and leaves room for further upside from the current levels. We have increased estimates for full-year 2010 and upgrade the stock to Outperform. We set a six-month price target of $225.