Apple (AAPL) Price Target Raised to $720 at Goldman; Next Big Thing Isn't Hardware, Says Analyst

Goldman Sachs maintained a Buy rating on Apple (NASDAQ: AAPL) and raised its price target to $720.00 (from $635.00). The change comes ahead of Apple's WWDC next week. Analyst Bill Shope said Apple's "next big thing isn't hardware."

"While Apple’s software-only events have rarely captured the same level of excitement as its hardware launches, we believe this should change. Indeed, with the potential for substantial hardware differentiation narrowing and few new hardware categories that can substantially impact Apple’s $175 billion revenue base, iOS platform differentiation is becoming increasingly critical," said Shope.

"We expect upcoming hardware refreshes to act as powerful near-term drivers of earnings momentum and stock performance, but platform enhancements such as mobile payments, connected home solutions, and personal health monitors should be far more important for driving switching costs and installed base expansion over time, and this is what will determine if Apple’s cash flow can remain robust and substantially increase from current levels. We have increasing confidence in this respect, and we are raising our 12-month target price to $720 from $635," he added.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $635.38 yesterday.

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