Apple Inc. (NASDAQ:AAPL) will likely unveil the new iPhone tomorrow, and analysts are updating their views on the stock ahead of that announcement. Goldman Sachs analysts remain Buy rated on the company with a $530 per share price target. They said tomorrow’s event is “the first in a series of events that should begin to determine whether the bears or bulls will have the upper hand into year end and 2014.”
Apple’s iPhone 5C, new carrier partnerships to spur new user growth
Analysts Bill Shope, Elizabeth Borbolla, Cristina Colon and Justin Price are clearly on the bullish side of Apple Inc. (NASDAQ:AAPL). They note that Apple shares are up 19 percent since the company’s last earnings report on July 23. In that same time frame, the S&P 500 has declined 2 percent.
They believe that earnings estimates for Apple will keep trending upward over the next few months, particularly thanks to a resurgence in new user growth. The analysts believe one of the key drivers of new user growth will be the launch of the lower priced iPhone 5C. They believe the other major contributor to new user growth at Apple Inc. (NASDAQ:AAPL) will be new carrier partnerships with China Mobile (China’s biggest mobile carrier) and NTT DoCoMo (Japan’s biggest carrier). Partnerships with both carriers have been hinted at in media reports over the last few weeks.
Other implications of the iPhone launch
The analysts say the iPhone 5S has the potential to trigger “a more enthusiastic installed base refresh” than what happened with the iPhone 5. In addition, they said the enhancements Apple Inc. (NASDAQ:AAPL) is expected to unveil in iOS 7 tomorrow “further solidify” the company’s competitive advantages when it comes to the iOS platform.
The Goldman Sachs analysts believe that “even a modestly successful iPhone product cycle” may pave the way for “a fairly substantial recovery” in the company’s stock price.