UPDATE: UBS Investment Research Initiates Buy on Apple, Says Empire Building Not Over

UBS Investment Research initiated its coverage on Apple (NASDAQ: AAPL) with a Buy rating and a price target of $740.

UBS Investment Research noted, "Apple is creating a tech empire that likely has not reached its zenith. Our Wave Principle teaches that empires don't last. We recommend the stock, however, because the relatively low valuation seems to discount a too-pessimistic future given moderate smartphone and tablet penetration as well as potential new products. … Two bullish keys to financial results are (1) the iPhone, which is two-thirds of profit, and (2) Asia, which was 40% of profit growth last year. The next couple quarters have some risk due to the iPhone transition, but Apple's capex plans suggest upside to our unit estimates. Long-term EPS of over $70 looks achievable."

Apple closed at $608.21 on Tuesday.