Apple Has 20% Upside

NEW YORK (TheStreet) -- Apple (AAPL) announced on Monday that iPhone 5 pre-order sales shattered previous records and AT&T (T) also reported stellar iPhone numbers. With all of this, and the stock surpassing $700, a number of analysts believe there's at least 20% upside ahead.

Merrill Lynch analyst Scott Craig raised his price target from $770 to $850, citing more than 20% upside from current levels, with a faster-than-expected iPhone 5 rollout prompting him to raise his earnings estimates. "Our new EPS estimates are meaningfully above Street, with potentially another ~5% upside to our above consensus $56 EPS estimate for F2013 if Apple's gross margin were to progress similar to the iPhone 4S cycle," Craig wrote in his research note. He rates Apple shares "buy."

Apple has said that the iPhone 5 will be available in 100 countries, including China, by the end of the year. This is a testament to the job CEO Tim Cook's doing. The Apple chief may not be the product visionary his predecessor Steve Jobs was, but he's undoubtedly an operations genius.

Within its first 92 days, the iPhone 4S was available in 90 countries, according to Craig. That's a sharp increase from the iPhone 3G, which was in just 70 countries within 174 days of becoming available.

China also represents a major opportunity for Apple, as Cook has previously indicated. Apple already has a partnership with China Telecom (CHA) , and there has been increased speculation that the iPhone 5 will come to China Mobile (CHL) , once the world's largest carrier gets its 4G network up and running.

Initial reaction from some tech journalists, Wall Street analysts and the mainstream media was tepid towards the iPhone 5, yet Cook and his team have created another product that the masses are clamoring for.