Technology giant Apple Inc. (NASDAQ:AAPL) this morning received some positive commentary from analysts at Stifel Nicolaus ahead of next week’s key earnings report.
The firm reiterated its Buy rating on AAPL and lifted its price target from $120 to $130, noting it believes the company will deliver market-beating results in its Q4 earnings next week. That new price target suggests a 10.5% upside to the stock’s Monday closing price of $117.55.
Stifel also boosted its Q4 and Q1 earnings estimates for the company, citing higher expected iPhone 7 shipments. For fiscal Q4, the analyst now sees EPS of $1.69 on $47.7 billion in revenue, up from $1.57 on $45.6 billion. For Q1, the firm sees EPS of $3.17 on revenue of $74.3 billion, up from $3.01 and $70.5 billion.
The firm lauded Apple’s massive installed iPhone user base that is nearing 700 million. Using that number and an 8-10% upgrade rate to the new iPhone 7, Stifel sees potential upside to existing shipping estimates for the new device.
Apple launched its new flagship iPhone 7 last month. Since then, investors and analysts have been trying to gauge the success of the device. Carriers have said that iPhone pre-orders blew away all previous records, while component suppliers are seeing much more muted demand.
Much of the controversy will be put to rest next week, when Apple delivers its latest report.
Apple shares rose $0.64 (+0.54%) to $118.19 in premarket trading Tuesday. Year-to-date, AAPL has gained 11.68%, more than doubling the performance of the benchmark S&P 500 during the same period.