Analysts have Raised Apple’s (NASDAQ:AAPL) Price Target as iPhone 6 and iWatch Release Date Approaches

As the Apple (NASDAQ: AAPL) iPhone 6 and iWatch release date approaches, analysts have raised price targets for the company.

Bigger Screen and New iWatch

The iPhone 6 will feature a bigger screen. A bigger screen size in the five-inch range would target a higher end market estimated to make up 25 percent of the higher end smartphone market. Apple has made a majority of its profits from selling the iPhones, with half its revenues derived from selling the units. As a result, they’ve gone on to risk entering the wearable device market with their latest new device: the iWatch. The growth of these two products in the new market explains why investors are attracted in Apple’s stock.

Analysts Increasing Price Targets

As a result, analysts have increased their price targets.

AppleInsider has revealed that Rod Hall at JP Morgan has raised his price target from $89 to $108 citing the new technologies that will enter the market by 2014 according to a letter to investors.

Toni Sacconaghi Jr., Jonathan Cofsky, and Eric Garfunkel at Berstein have raised their price target to $100 per share with a bullish rating. They cite that the stock has little downside, and greater interest due to its seven-for-one stock split. These three managers believe that the stock price will rise before the products are launched.

Kulbinder Garcha at Credit Suisse has also projected a price target of $96 from his prior price target of $85.71 citing iServices’ success, and big subscription-based revenue from the recent Beats acquisition. He believes Apple will expand its market share in streaming music.

Apple’s New Market: Subscription Music

The market for music subscription revenue is still new and growing. Apple has an opportunity to penetrate the market and gain market shares which could increase the value of the company’s stock. He states that the subscribers’ base can grow from 14 million paying subscribers in 2013 to 149 million by 2025 due to penetration increase from 5% to 20% in all the major music markets in the world. These penetration values would still be lower than pay TV subscription in mature markets and just a fraction of global smartphone penetration. Sweden and Norway are two countries where music service penetrations have already reached 19-24% of all music revenues.

Other Analysts

Needham, investment firm, cites Iphone4s stronger than expected sales during March quarter, along with the introduction of the Swift language and larger iPhone 6 screen size. He believes the introduction of this new language could be the biggest addition to Apple and could attract many Android users. They have thus set a price target of $97.

Timothy Arcuri at Cowen & Company increases its price target for Apple from $90 to $102 based on a projection of 100 million units for the iPhone 6 before 2014 ends and the successful introduction of the iWatch.

Amit Daryanani from RBC Capital Markets updated its price target to $100 per share based on the belief that the iWatch will become a health monitoring device and the success of the iPhone 6 estimating a price of $299.