Apple Inc. (Nasdaq: AAPL) shares rose Monday, following a Wall Street upgrade citing several product catalysts and potential upside from declining memory prices.

Citigroup analyst Richard Gardner this morning upgraded his rating on Apple to Buy from Hold, maintaining a $105 price target on the stock.

The analyst noted several products in coming quarters, including the AppleTV, Mac's new OSX Leopard operating system, and the highly-anticipated iPhone.

The AppleTV is set to start shipping this month, Apple said in its Macworld Expo in January. Gardner expects revenue of about $500 million in calendar year 2007 and $1 billion in calendar 2008. The Leopard launch should also add several pennies to EPS in the June and September quarters.

As the Cupertino Calif.-based electronics maker enters the mobile phone market this June, Citigroup expects limited volumes for the first months, but revenues should boost to $2 billion in calendar 2007 and $5 billion in calendar 2008, Gardner believes.

Perhaps the largest upside to Apple may come from its existing products, as its flash-memory products, such as the iPod, could see significant gross margin upside.

We do not believe the Street fully appreciates the positive margin impact of recent declines in component pricing, Gardner wrote. Barring product price cuts - which we view as unlikely - Apple should significantly exceed consensus EPS during the March quarter on higher-than-expected gross margin.

Apple shares rose $1.19, or 1.43 percent by mid-day trading on the Nasdaq, hitting $84.41.

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