Market Preview: All About Apple

That's fueled speculation of less-than-robust sales this quarter and the next as some Apple fanatics hold off on the current menu of i-everything in anticipation of the next big release. Apple's own outlook is for earnings of $8.68 a share in the third quarter on revenue of roughly $34 billion, well below consensus.

The stock is up more than 45% so far in 2011, but it's pulled back a good amount since hitting an all-time high of $644 on April 10. At current levels, the shares are still reasonably priced, trading at a forward price-to-earnings multiple of roughly 11X vs. 13.3X for the S&P 500 as of Friday's close.

The sell side is still overwhelmingly bullish with 48 of the 53 analysts covering Apple at either strong buy (22) or buy (28) and the 12-month median price target sitting at $745, implying potential upside of 23% from Monday's finish at $603.83.

Sterne Agee previewed the quarter on Monday, lifting its earnings estimate to $10.45 a share from $10.16 a share and boosting its full-year view to $47.10 a share from $46.75 a share. The firm has a buy rating and a $780 price target on Apple, which has beaten Wall Street's profit expectations in three of the past four quarters.

"Based on our supplier checks, we anticipate light revenue, an EPS beat, and conservative guidance," Sterne Agee said. "Talking to investors, there appears to be understanding that the next two quarters will be 'choppy' ahead of the 6th gen. iPhone, the big picture being that this will likely be the most powerful mobile phone upgrade cycle ever."

In particular, Wu thinks the headline number on iPhone shipments could be a miss vs. Wall Street expectations, which have been slowly coming down as analysts parse recent guidance from Apple suppliers.

"We believe that iPhone upside in the June and September quarters is less likely due to lower supplier build plans," Wu said. "While we are pleased to see consensus estimates being cut over the last few weeks as analysts aim to be more responsible, we believe they may still be too high at 29 million units, compared to what our checks indicate will more likely be in the 26-28 million range (we are at 27 million)."

Check out TheStreet's quote page for Apple for year-to-date share performance, analyst ratings, earnings estimates and much more.