Apple Passes $600 a Share for First Time on IPad Anticipation

Apple Inc. (AAPL), getting a boost from anticipation of the new iPad, rose past $600 for the first time.

The shares gained as much as 1.8 percent to $600.01, before retreating to $592.8 at 10:41 a.m. in New York and giving the Cupertino, California-based company a market valuation of about $552 billion.

Apple will start selling a new iPad tablet tomorrow and cut the price of the previous version, helping widen its lead over competitors. At least five analysts raised their share-price estimates for the stock this week, citing the iPad’s dominance over products from Amazon.com Inc. (AMZN), Microsoft Corp. and Google Inc. (GOOG), as well as growing sales in China and Brazil.

“The creativity and the ingenuity of the company has driven the stock to this level,” Philip Orlando, the New York- based chief equity strategist at Federated Investors Inc. (FII), which oversees about $370 billion including Apple shares, said today in a phone interview. “New products and financial engineering are going to drive the stock in the future.”

As of yesterday, Apple gave investors a 555 percent return in the past five years and had outperformed the Standard & Poor’s 500 Index by 543 percent. Since 2007, investors paid an average 43 percent premium for Apple’s earnings compared with the S&P 500’s earnings. The premium yesterday was about 16 percent.

“Apple’s earnings power is potentially far greater than investors believe and our prior bull case model suggested,” Katy Huberty, an analyst at Morgan Stanley in New York who increased her share-price estimate to $720, said in a note to investors.

Apple in February became the sixth U.S. stock to top $500 billion in market value.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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