UPDATE 2-RESEARCH ALERT-Analysts raise price target on Apple

(Recasts throughout, adds details, share movement)

By Jennifer Robin Raj

BANGALORE, April 24 (Reuters) - Morgan Keegan upgraded
Apple Inc (AAPL.O: Quote, Profile, Research), while several others, including Citigroup
and Lehman Brothers, raised their price target and estimates
for the iPod maker on Thursday, a day after the company posted
a higher quarterly profit on strong Macintosh computer and iPod
sales.

Morgan Keegan raised Apple to "market perform" from
"underperform," citing "tremendous momentum in the Mac business
with 50 percent-plus unit growth."

Apple's second-quarter results are likely good enough to
keep its stock stable following its recent run, the brokerage
said. Apple shares have risen 22 percent over the last month.

Morgan Keegan, however, noted that while iPhone shipments
were ahead of its estimates, iPod trends continued to weaken.

IPods decelerated 17 percent in December through February,
until the $30 price cut for the iPod shuffle in February
boosted weekly sales rates, RBC Capital said.

Lehman Brothers said Mac, iPod and iPhone units all beat
estimates with solid demand and no inventory surplus, adding
that concerns around Apple's gross margins were overblown.

Apple's gross margins fell to 32.9 percent in the second
quarter, from 35.1 percent a year ago.

The company blamed the slide on lower sales of its Leopard
operating system, a price cut on the low-end iPod shuffle and
higher sales at its iTunes online music and movies store.

MOMENTUM ECLIPSES MARGINS?

RBC, however, said investors would look past the gross
margin softness and focus on the stronger momentum, product
cycle/catalysts, share gains, iPhone 3G and Apple's growing
market opportunity.

Citigroup said, "Despite the lower-than-expected gross
margin, revenue and unit upside is obviously a preferable
outcome."

Apple's net profit for the quarter rose 36 percent to $1.05
billion while revenue grew by 43 percent.

Apple shares were trading up $4.57 at $167.46 in afternoon
trade on Nasdaq. They touched a high of $168.01 earlier in the
session.

Following table lists the price target changes:

Brokerage Price Target Rating

New Old

Lehman $202 $195 Overweight

RBC Capital $200 $190 Outperform

Citigroup $248 $212 Buy

Deutsche Bank $235 $225 Buy

WR Hambrecht $238 $218 Buy
(Editing by Himani Sarkar)