UPDATE 2-Lehman Brothers, Citigroup raise Apple's price target

(Adds S&P Equity, Citigroup and BernsteinResearch comments)

June 10 (Reuters) - Several brokerages raised their price target on Apple Inc's (AAPL.O) shares, citing the new 3G iPhone at a discounted price and new market opportunities.

Citigroup, which has a "buy" rating on the stock, raised its price target to $287 from $248, while Lehman Brothers raised its price target to $234 from $202 and kept its "overweight" rating.

Standard & Poor Equity Research Services raised Apple to "buy" from "hold" and boosted its price target on the stock to $210 from $200.

Apple shares were up about 2 percent at $184.55 on heavy volume in morning trade on Nasdaq.

Lehman Brothers analyst Ben Reitzes said the iPhone's new price of $199 and Apple's ability to drive multiple revenue streams would help the stock.

Citigroup analyst Richard Gardner said Apple's decision to move from a revenue share model to subsidy model for the iPhone is a significant positive because the company receives iPhone-related cash flow sooner.

"The biggest surprise was the speed with which Apple is abandoning the revenue sharing model in favor of a traditional subsidy model," Gardner wrote in a note to clients.

S&P Equity Research analyst Tom Smith said iPhone's international expansion by the year-end selling season would aid revenue, whereas higher volume production would help margins.

But one brokerage, BernsteinResearch, was skeptical. It said the most important aspect of the new 3G iPhone is not its feature set, but Apple's decision to change the iPhone's business model.

The brokerage, which rates the stock "market-perform" and has a $165 price target, believes Apple's fiscal year 2009 sales and earnings from postpaid iPhones will not differ materially from the brokerage's base-case model, as increased units from a lower price will be offset by fewer unlocked phones and lower profitability per phone.

Apple said the new phones will go on sale July 11 in 22 countries and regions, expanding to 70 by the end of the year.

In a separate move, Lehman cut its price target on AT&T Inc (T.N), the exclusive U.S. carrier for the iPhone, to $49 from $54. The company said on Monday that it expected the iPhone subsidies to cut its earnings per share by 10 cents to 12 cents in 2008 and 2009.

AT&T has also said the subsidies would put pressure on its forecast for double-digit earnings growth this year.

"We believe existing revenue sharing arrangement (with Apple) costs AT&T $100 during the life of an iPhone customer", Lehman Brothers analyst Thomas Seitz wrote to clients. He kept his "overweight" rating on the stock.

AT&T shares were down about 1 percent at $37.20 on the New York Stock Exchange. (Reporting by Bijoy Koyitty in Bangalore; Editing by Jarshad Kakkrakandy, Bernard Orr)