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Apple (AAPL) Price Target Raised to $620 at Goldman Sachs; Analyst Notes Strength in Platform

April 24, 2014 6:53 AM EDT
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Price: $173.72 +0.64%

Rating Summary:
    40 Buy, 24 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 2 | New: 35
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Goldman Sachs maintained a Buy rating on Apple (NASDAQ: AAPL) and raised its price target to $620.00 (from $610.00). Analyst Bill Shope said Apple's platform showed its strength.

"Apple reported hefty 2Q14 upside, with revenues of $45.65 billion exceeding our estimate of $43.88 billion and consensus of $43.53 billion, and EPS of $11.62 surpassing our estimate of $10.42 and consensus of $10.18. The upside was primarily driven by stronger iPhone sales, which also drove gross margins to 39.3% (versus consensus of 37.6%), representing the highest margin since September of 2012. Apple also added $30 billion to its share repurchase authorization, hiked its dividend by 8%, and announced a 7:1 stock split, effective on June 9th. The company guided to 3QFY2014 revenues of $36 billion to $38 billion, (vs.our prior estimate of $37.51 billion) and gross margins of 37% to 38% (vs. our 38.3% estimate), which was far better than most feared. Opex guidance of $4.4 billion to $4.5 billion was far ahead of our $4.0 billion estimate, however, as the company appears to be ramping R&D more heavily than expected ahead of new product releases," said Shope.

"We are adjusting our model to reflect this quarter’s strong results and the expanded capital allocation plans. We now forecast FY2014 revenues of $182.03 billion and EPS of $44.70, from $181.24 billion and $44.51 previously. For FY2015, we now estimate revenues of $204.53 billion and EPS of $52.69, from $204.68 billion and $52.59. For FY2016, we now estimate revenues of $230.21 billion and EPS of $62.66, from $230.13 billion and $61.18," 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 $524.75 yesterday.



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