In a recent note to investors, UBS analyst Steven Milunovic has raised the price target for Apple stock (AAPL) to $700 from his previous level of $625, saying he is increasingly confident that iPhone sales in the U.S. will be particularly strong for Apple’s so-called ‘iPhone 6’, a device that will offer significant user upgrades, AppleInsider is reporting. Milunovic added that a number of iPhone 4/4S owners who skipped the iPhone 5/5s upgrade cycle, may be holding out for Apple’s next-generation model.
“The analyst cited survey data from YouGov.com that suggested more than half of all U.S. iPhone users are due for an upgrade over the next 10 months. “Investor sentiment has been somewhat apathetic as reflected by two-thirds of funds owning Apple being underweight,” he wrote. “That view may change starting next week.” Next week, of course, is Apple’s Worldwide Developers Conference, where the company is expected to announce the next major updates to its iOS mobile operating system and OS X Mac platform.”
The growing number of rumours and leaks suggest that Apple will release the next iteration of iPhone with a larger display in two sizes of 4.7 and 5.5 inches. Milunovich believes those phones, along with the potential for an Apple-built wearable device, are good reasons for investors to buy in to AAPL stock.
The report points out that the old UBS price target of $625 went underwater earlier this week as Apple eclipsed it. The higher $700 target from UBS also comes after Barclays increase their own price target to $655 yesterday.