Apple Inc.’s upcoming iPhone 16 event has the potential to boost the company’s stock price significantly, according to a recent note from Goldman Sachs.
The bank anticipates that the announcement of unexpected positive developments could push Apple’s stock closer to its target price of $276, reflecting a potential upside of 25% from its closing price on Wednesday.
Goldman Sachs outlines four key factors for potential stock boost
Goldman Sachs highlighted four potential “upside surprises” that could enhance investor sentiment and drive Apple’s stock upwards:
Possible price increase for new iPhones: An increase in the price of iPhone 16 models could directly boost Apple’s revenue.
The bank notes that such a move would be justified by the ongoing innovations in hardware and the value added to consumers over the years.
Goldman Sachs analyst Michael Ng pointed out that the base model’s storage could be upgraded from 128 GB to 256 GB, which may contribute to a price hike.
Notably, the iPhone Pro has not seen a price increase since its introduction with the iPhone 11 Pro in September 2019.
Earlier launch of Apple Intelligence features: If Apple introduces its new AI features and apps sooner than expected, it could generate additional excitement and sales.
The rollout of these features is anticipated to accelerate iPhone revenue growth, with Goldman Sachs forecasting a 9% increase in revenue for 2025 and 2026.
New iPad announcements: The introduction of updated iPads could further drive consumer interest and spending, contributing positively to Apple’s overall product ecosystem.
Better-than-expected promotions from telecom carriers: Attractive subsidy programs from major telecom carriers like AT&T, Verizon, and T-Mobile could entice customers with heavily discounted iPhones, boosting sales.
Source: TradingView
Historical performance suggests ‘sell the news’ trend
Despite the potential for these positive surprises, Apple’s previous iPhone launch events have often followed a “sell the news” pattern.
Over the past five years, the stock has typically underperformed the S&P 500 by an average of 0.70% on its major iPhone announcement days.
This historical trend suggests that while the event may create initial enthusiasm, it might not necessarily sustain long-term gains.
Anticipations beyond the iPhone 16
In addition to the iPhone 16, Apple is expected to make announcements regarding other product lines. A refresh of the Apple Watch lineup is anticipated, along with the fourth-generation update of its AirPods.
These updates could further enhance Apple’s appeal to consumers and investors alike.
Goldman Sachs revises price target upwards
Goldman Sachs has slightly increased its price target for Apple’s stock to $276, up from the previous target of $275.
This revision reflects the bank’s optimism about Apple’s potential to capitalise on its innovations and strategic moves in the tech market.
Market sentiment and future outlook
The upcoming iPhone 16 event is poised to be a significant moment for Apple, with the potential to impact the company’s stock performance in the short term.
Investors and analysts will be closely watching for any announcements that could drive the stock towards Goldman Sachs’ target price.
As always, the actual impact will depend on market reactions and the effectiveness of Apple’s new product offerings and promotions.
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