Jefferies analyst Peter Misek sees a lucrative boost for Apple based not on the just released iPhone 5s, but on the iPhone 6. He raised his target price for Apple's stock from US$425 to $600 based on his belief that the next iPhone model will bump up to a 4.8-inch display from the current 4-inch screen found on the iPhone 5, iPhone 5s, and iPhone 5c.
Jefferies analyst Peter Misek thinks Apple's next iPhone will sport a 4.8-inch screen
Mr. Misek thinks it's the iPhone 6 that'll bring Apple big money, and that the iPhone 5s will make do until the bigger screen model comes out. He stated,
Despite still seeing risk to [the fourth calendar quarter] and [fiscal 2013] revs, we now believe better GMs will allow Apple to skate by until iPhone 6 launches with its 4.8-inch screen. We estimate about 50 percent of smartphone shipments have [greater than] 4-inch screens and that iPhone 6 will catalyze a large upgrade cycle.
He also said he saw a “substantial shift in attitude towards Apple” in a recent trip to Asia, according to Street Insider.
Apple hasn't said what features the next iPhone model will have, and the company certainly hasn't said anything about increasing the display size. The company has standardized on a 4-inch Retina Display for the iPod touch and iPhone line, although the company is still selling the older iPhone 4s with a 3.5-inch display. The 4-inch display is smaller compared to some Android smartphones, but that doesn't seem to be hurting iPhone sales.
Assuming Apple could find a design it feels works well with a larger display, it could ship a bigger iPhone model, but so far there haven't been any hints coming from the Cupertino-based company that it plans to do that. Instead, we're seeing rumors and speculation — some of which seems to be inspired by analysts simply wanting Apple to make a larger screen phone — but no solid information to support the notion.
Mr. Misek raised his fourth fiscal quarter EPS from $8.14 up to $8.36, and his fiscal 2013 to $39.87 from $39.66. For fiscal 2014, he's projecting an EPS of $44.22, up from $37.95.
Along with his new $600 target price, Mr. Misek changed his rating for Apple's stock from “Hold” to “Buy.” Apple is currently trading at $490.64, up 7.46 (1.58%).