Goldman Sachs has raised its earnings forecasts for Apple as it expects the upcoming release of the 10th anniversary iPhone to boost sales
Apple Inc. (NASDAQ:AAPL) has received another target price hike – this time from Goldman Sachs, which expects the tech giant will unveil its first US$1,000 iPhone in September.
The iPhone maker became the first company to see its market capitalisation surpass US$800bn on Monday after Drexel Hamilton raised its target price to US$202 a share from US$185, giving the company an estimated US$1trn valuation.
Now Goldman Sachs has joined in on the Apple love, lifting its target price to US$170 from US$164bn and reiterating a ‘buy’ rating on the stock.
The bank said Apple’s pricier iPhones to be released later this year, including a 128 gigabyte model for at US$999 and a 256 gigabyte model for US$1,099, could boost average selling prices and gross margins.
Goldman believes this would “drive meaningful upside” to the stock and raised its 2018 and 2019 earnings estimates to reflect its positive outlook.
Shares in Apple rose 0.90% to US$155.35 in early US trading.
Apple’s shares have gained 16% in the past three months and 70% in the past year, outperforming US indices S&P 500 and the Dow Jones Industrial Average.
Drexel Hamilton expects Apple’s valuation will reach $1T as investors begin to realise its growth potential. Brian White, an analyst at Drexel, said Apple’s future prospects look solid with the release of the iPhone8 in September, along with other new innovations and an increase in its capital return programme by $50B by the end of March.