Shares of Apple rose today after Pacific Crest upgraded the rating of stock to outperfrom as the cellphone giant is expected to release an iPhone with bigger 4.7 inch display and USD 299 starting price tag.
Investors were issued a note by analyst Andy Hargreaves on Tuesday setting a new price target of USD 635 which is about 100 dollars more than Apple’s current trading price. He says the larger iPhone with starting price of USD 299 will increase gross profit on replacement sales. At the same time, it would attract new customers that would go for an Android phone for bigger display.
As much as USD 4 in earnings per share in 2014 will be gained by Apple if 35% of iPhone customers opt for the larger display. He adds that the Cupertino giant would capture 10% of phablets, a term popular used for smartphones with more than 4.5 inch display.