* Macs, iPhones key; investors expect beat
* Focus on Q3 outlook to gauge iPad demand
* Wall St. expects Q2 EPS $2.43, rev $12.03 bln
SAN FRANCISCO, April 16 (Reuters) - Apple Inc's AAPL.O shares have barreled upward at a torrid pace over the past year, yet as the company's quarterly report approaches, no one on Wall Street seems prepared to slap an "overvalued" tag on the company.
Apple, riding strong iPhone and Mac sales, has made mincemeat of consensus estimates in recent quarters. That, combined with the dizzying hype of April’s iPad launch, has helped send its shares to all-time highs.
Analysts say the company's stock remain attractive -- if not cheap -- heading into Tuesday's earnings release. Investors are eyeing new catalysts on the horizon, in the form of a Verizon VZ.N iPhone and continued iPad strength.
Industry watchers say valuing Apple’s stock is part art, part science, because peer comparisons are difficult, both present-day and historically.
“Valuing Apple is almost like sticking your finger in the wind,” said Rodman & Renshaw analyst Ashok Kumar. “But it’s one of the few secular growth stories in technology, with the caveat that they’re still highly dependent on iPhones.”
“If you take your money out of Apple, where are you going to put it? No one else that offers what they do,” he said.
Apple trades at 21 times forward earnings, but the company is difficult to compare directly with competitors because of a unique product set that spans computers, smartphones, consumer electronics and content.
For example, top PC maker Hewlett-Packard Co HPQ.N trades at 12 times forward earnings, smartphone giant Research in Motion Ltd RIM.TO trades at 14 times, and online retailer Amazon.com AMZN.O trades at 50 times.
“You can’t give Apple a peer comparison, you can only give them a mathematical one,” said Hudson Square Research analyst Daniel Ernst.
With a $300 price target, he said Apple’s shares are still undervalued. “The simple reason is growth.”
Ernst expects Apple’s earnings per share to climb at a combined annual rate of 22 percent through fiscal 2012, and revenue to climb 20 percent.
The median price target on Apple is $280, according to Thomson Reuters I/B/E/S. Apple shares were trading around $246 on Friday.
Investors expect Apple to again post quarterly numbers above Wall Street targets -- perhaps significantly higher. Apple has surpassed consensus earnings estimates for the past two years, and has failed to top sales targets only once.
In the previous two quarters, Apple shares have received a bounce on the day after its earnings report, only to slide in the following days, as investors took profits.
EYES ON FORECAST
Apple is notorious for its low-ball forecasts, but Wall Street will be paying particularly close attention when the company lays out its outlook for the June quarter, the first one to include iPad sales.
Edward Jones analyst Bill Kreher said the forecast will provide the first glimpse of Apple’s expectations for the 9.7-inch touchscreen device, along with hints about its margin profile, which many believe is around 50 percent -- better than Macs, but lower than iPhones.
“If they give us a forecast that’s actually somewhat in line with estimates, the stock will fly,” he said.
The iPad may be soaking up all the attention, but it is Apple’s money-making workhorses, the iPhone and the Mac, which will determine whether the company’s quarterly report again crushes Wall Street’s estimates.
The company is expected to sell 7 million to 7.5 million iPhones, roughly 2.8 million Macs, and 9 million to 10 million iPods in the quarter.
Macs could be a major driver in the quarter, but they are also something of a wildcard, given conflicting data provided by PC industry trackers. Gartner said Apple’s U.S. shipments surged 34 percent in the January-March period, while IDC said shipments rose a mere 8 percent
The company is expected to report earnings of $2.43 a share on revenue of $12.03 billion, according to Thomson Reuters I/B/E/S.
But Thomson Reuters StarMine, which gives more weight to estimates from top-ranked analysts, predicts earnings of $2.50 a share on revenue of $12.1 billion.
Wall Street is targeting a gross margin of 40 percent. But Apple has warned that higher component costs and a strengthening U.S. dollar will impact margins.
Apple is the second most valuable U.S. technology company, with a market capitalization of around $225 billion. It continues to gain on its age-old nemesis Microsoft Corp MSFT.O, whose market cap stands at roughly $270 billion.
Reporting by Gabriel Madway; Editing by Edwin Chan, Phil Berlowitz
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