An analyst at Needham & Company, an investment research firm raised its price target for the stock of Apple Inc. (NASDAQ:AAPL) to $97 per share citing the reason that the tech giant will be able to generate stronger-than-expected iPhone sales. The analysts also believed that the new programming language called Swift will serve as a positive catalyst for the stock.
Needham analyst, Charlie Wolf adjusts his price target for Apple twice a year (February and August. In February, prior to the implementation of the 7-for-1 stock split, his price target for Apple was $590 per share.
The tech giant exceeded that amount because Apple sold 44 million iPhones during its March quarter. The figure is higher than the estimates of Wall Street analysts.
Following the implementation of the 7-for-1 stock split, Wolf’s price target for Apple was $86.32 per share, which is below the trading price of the company. He is expected to release an update regarding his conviction on the stock in August, but he broke his pattern and increased his price target.
Three reasons behind Apple Inc. PT increase
Wolf explained that he suddenly increased his price target for the shares of Apple because three reasons. The first and major reason was the surprising success of the iPhone 4S in the first quarter. In addition, the most affordable handset represented approximately 25% of the iPhone sales during the period, which shows that tech giant’s ecosystem is adding consumers from emerging markets.
The analyst also indicated that the newly introduced Swift programming language during the annual Worldwide Developers Conference is the most significant this year as it could attract user to switch to iPhone.
In a note to investors, Wolf emphasized, “If software does indeed drive hardware choices, we believe Apple has leapt ahead of the tools available on the Android platform. This in turn should translate into an increasing percentage of high-end Android users switching to the iPhone when they upgrade.”
Wolf also said the launching of the iPhone with a larger display is the third reason that compelled him to raise his price target for Apple. He believed that the new iPhone with a five-inch screen would target 25% of the high-end smartphone market.
Other investment research firm raised PT for Apple Inc.
Aside from Needham & Company, two other investment research firms increased their price target for the shares of Apple. RBC Capital Markets elevated its price target for the stock to $100 per share while Cowen & Company raised its expectation to $102 a share.