Apple Inc. Price Target Raised on Strong iPhone Sales

Apple Inc. (NASDAQ:AAPL) surprised many investors with the strength of the iPhone 5S in the March quarter, which usually is quite seasonally slow for Apple. Many believed demand would surely die down in the current quarter, but Canaccord Genuity analysts say that’s not the case, according to their checks. Their survey indicates that the iPhone 5S ranks at the top of the sales list at all four of the major carriers in the U.S.

Apple’s price target goes to $660

Analyst Michael Walkley increased his price target for Apple Inc. (NASDAQ:AAPL) to $660 per share. The company’s stock price was above $600 a share earlier this week, although it has since come bad down. Walkley previously had his price target set at $610 a share, so the increase comes just as the stock was about to overtake that target.

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The analyst said his survey showed now only that the iPhone 5S was the top-selling smartphone at every tier-one carrier in the U.S., but also within multiple global channels. His April survey also indicated that customers have been choosing early upgrade programs more and more and tend to favor the higher-end smartphones when opting for these early upgrade programs. The big four U.S. carriers all offer such programs.

Apple to further benefit from early upgrades

Because of these findings, the Canaccord Genuity analyst said he thinks Apple Inc. (NASDAQ:AAPL) stands to benefit significantly, especially as it prepares to launch the iPhone 6 this year. He thinks the upgrade programs could boost Apple’s iPhone sales, as could anticipation for an iPhone with a bigger screen. He believes that this year’s iPhone upgrade cycle will be especially strong.

The analyst also suggested that Apple Inc. (NASDAQ:AAPL) could raise the price for the iPhone 6, echoing the ideas of several other analysts recently. He thinks the company could get away with charging a premium for the larger handset. He said carrier subsidies or payments done through one of the smartphone leasing programs could create some “solid incremental gross margin dollars” from the bigger screen iPhone 6, even if it does partially cannibalize some sales of the iPad Mini, as some believe it might.

Walkley maintained his Buy rating on Apple Inc. (NASDAQ:AAPL).