The firm anticipates a solid March quarter from the gadget giant.
CUPERTINO, Calif. (TheStreet) - Apple's(:AAPL) shares have been on a rollercoaster of late, but Goldman Sachs(:GS) believes that the tech giant still has much to offer investors, raising its earnings estimates and price target on Wednesay.
"Despite recent volatility, we continue to believe Apple's shares are very attractive at current levels," explained Goldman Sachs analyst Bill Shope, in a note released on Wednesday. "It remains our top pick, and we'd be buyers ahead of March-quarter results." Goldman Sachs raised its Apple estimates and price target on Wednesday.
Goldman lifted its 12-month Apple price target by 7% to $750 from $700. The investment bank also hiked its second-quarter revenue and earnings estimates to $36.9 billion and $10.18 a share, respectively, from $34.2 billion and $9.36 a share, citing strength in iPhone and iPad sales. The current average estimate of analysts polled by Thomson Reuters is for a profit of $9.95 a share on revenue of $36.64 billion.
For calendar year 2012, Goldman expects revenue of $166.9 billion and earnings of $45.76 a share, compared to its prior estimate for revenue of $158.2 billion and earnings of $43.86 a share. The firm also increased its 2013 sales and earnings forecast from $186.6 billion and $53 a share, respectively, to $200 billion and $56.67 a share.
Shares of Apple, which reports its second-quarter results on April 24, have slipped almost 3% over the last five days, after enjoying months of stellar growth. Overall, the iPhone maker's stock is still up more than 50% this year.
The tech giant recently received a rare downgrade amidst concern that carrier partners may rein in their iPhone subsidies. Goldman's Shope, though, thinks the company should outperform this quarter and through fiscal 2012.
"We expect solid March-quarter upside, which is likely to trigger healthy increases in iPhone, iPad and overall earnings expectations for the full year," he explained, in his note.
All the signs certainly point to robust sales for Apple's latest iPad, which was launched last month. The company enjoyed "record" demand for the tablet, according to Apple CEO Tim Cook, selling 3 million of the devices during the first weekend of sales.
There has, however, been some concern that Apple's stock could be impacted by the lack of major product events until the rumored launch of the iPhone 5, which is expected to happen during the summer. Apple's previous iPhone launches have taken place during the company's Worldwide Developers' Conference (WWDC) in June, hitting the shelves shortly afterwards.
Goldman's Shope doesn't believe this will be an issue.
"We believe recent investor concerns over a 'catalyst-light' June quarter are misguided, since this will be the first full quarter with a refreshed iPad, a lower-priced iPad 2, and a fully ramped iPhone distribution channel," explained the analyst.
"In other words, the June quarter is when many of the recent catalysts begin to fully manifest into earnings power," he continued.
Apple shares gained $4.45, or 0.7%, to $614.15 in early action on Wednesday.
--Written by James Rogers in New York.
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