Apple Inc. (NASDAQ:AAPL) will kick off its iPhone 6 launch event at 10:00 a.m. Pacific Time at Flint Center in Cupertino. Ahead of the launch event, Goldman Sachs analysts Bill Shope, Matthew Cabral and Justin Price tried to assess where the stock will go after the event. Apple shares tumbled more than 4% when its biggest rival Samsung launched its Galaxy Note 4 phablet on September 3.
Apple to announce both models of the iPhone 6 today
Goldman Sachs said in its research note that last week’s sell-off has significantly reduced the risk of a usual post-launch sell-off for Apple stock. Analysts believed today’s event should renew investor confidence in Cupertino’s innovation pipeline in order to maintain the stock’s momentum in 2015. Platform enhancements such as mobile payments, HealthKit and HomeKit and new products such as the iWatch and iPhone 6 will help Apple regain investor confidence.
Goldman Sachs reiterates its Buy rating in the stock with $107 price target. The research firm is confident that Apple will announce both models, 4.7-inch and 5.5-inch, of the iPhone 6. There have been rumors that the 5.5-inch iPhone 6 could be delayed. If that happens, the stock could see some near-term pressure, said analysts.
There has also been some confusion around the release of the iWatch. Some reports claim that Apple may announce its wearable device at its September 9 event, but shipping won’t begin until early next year. Such a wide gap between announcement and launch may worry investors. But Goldman Sachs says it’s the norm when a company enters a new product category. This big gap will give Apple partners and developers sufficient time to build apps and peripherals for the new device.
iWatch to have a range of prices
What’s more, the tech giant has reported considered pricing the iWatch at $400. Goldman Sachs noted in its research report that the wearable device will likely be offered in a range of prices, and there should be lower-priced models. What about the mobile payments service? Apple is expected to extend its mobile payment service to brick-and-mortar outlets, enabling iPhone users to use their smartphone rather than credit cards. The tech giant has signed agreements with MasterCard, Visa and American Express.
However, Goldman Sachs isn’t focused on the revenue model of the mobile payment service Analysts said it’s an important platform enhancement that will increase the stickiness of the iOS ecosystem.
Apple shares gained 0.86% to $99.21 at 10:53 AM EDT on Tuesday.