Analysts who had over-estimated iPhone sales and underestimated the Mac re-evaluated Apple (AAPL) in the wake of the company’s impressive third quarter earnings report and issued new price targets across the board.

Goldman Sach’s David Bailey, whose estimate of 700,000 iPhone sold over the first three days was furthest from the mark, increased his price target from $135 to $165.

Piper Jaffray’s Gene Munster, who had upped his iPhone estimate from 200,000 to 500,000 when he saw how long the lines were on iDay, maintained his position as the most bullish analyst on record, moving his target from $205 a share to $211.

Shaw Wu of American Technology Research, who stuck with his original estimate of 125,000 iPhones sold in each of the first two days and won the jellybean contest by being closest to the correct answer (270,000 for the first day and a half of sales), moved his 6-12 month price target from $165 to $185.

(Our own back-of-the-envelope estimate of 172,000 units sold the first night, which was widely ridiculed at the time, turned out to be pretty good.)

Other firms raising their price target on Apple shares yesterday included JMP Securities ($160), Caris & Co. ($165), UBS ($175),
Pacific Crest ($175), Credit Suisse ($185) and Deutsche Bank ($200).

Several observers noted yesterday that as Apple shares rose in the midst of a broad market sell-off, the company’s stock valuation ($127 billion) passed both HP’s (HPQ) and Verizon’s (VZ) at $123 billion apiece.

If you want a graphic snapshot of how Apple’s stock fared compared with the rest of the tech sector yesterday, see Fake Steve Jobs’s "Think Different" summary here.

Finally, in a note to clients, ATR’s Wu put together a list of pros and cons that neatly anticipates the arguments of the Apple bulls and bears, saving us all a lot of tiresome chatter:

The Bulls Will Point To:
·         Mac
shipments came in at 1.76 million units, up 33% Y/Y, much higher than
expectations of around 1.6-1.65 million (we were at 1.64 million).
·
       International sales were very strong, up 29% Y/Y in Europe (21%)
and up 28% Y/Y in Asia-Pacific (7%). Americas (50%) grew 23% Y/Y.
·
       The gross margin came in at 36.9%, well above expectations and
our estimate of 32.4%. This was due to a favorable product mix and
AAPL’s ability to take advantage of favorable component pricing. To a
degree, we also believe this also reflects the high profitability of
iPhone.
·         iPhone ASPs appear to be over $600 (we estimate
$609) indicating that price (so far) isn’t an issue and the high
likelihood of additional high margin payments (subsidy and/or bounty).
·         iPod ASPs remained relatively unchanged Q/Q at $160.
·
       Net cash grew to $13.7 billion, up form $12.6 billion last
quarter, helped by strong cash flow from operations. Net cash per share
is now $15.46 per share, up from $14.18 last quarter.

The Bears Will Point To:
·         AAPL sold 270,000 iPhones exceeding our estimate of 250,000, but below overly aggressive forecasts of 500,000-700,000.
·         Japan (5%) continues to lag, with relatively flat revenue five quarters in a row.
·         iPod shipments of 9.8 million grew 21% Y/Y, continuing its trend towards slowing growth.
·
       AAPL’s accounting treatment of iPhone and Apple TV revenue where
hardware revenue is amortized over 2 years or 8 quarters remains
somewhat confusing and is unprecedented.
·         DSOs increased to 24 days from 16 days last quarter.

That about sums it up.