NEW YORK (TheStreet) -- Shares of Apple (AAPL) closed higher today, up 0.81% at $129.49, as Goldman Sachs raised its price target to $145 from $130, saying the risk-reward is more balanced, but "upside persists."
"We are updating our Apple scenario analysis and tactical map for 2015. The stock has appreciated by 20% versus a 6% increase in the S&P 500 since our last report [December 16], and recent data points have changed our key assumptions. Fourth quarter and 2015 iPhone units posted 12% upside to our prior bull case unit scenario, EPS exceeded by 8%, and operating cash flow exceeded by 31%," Goldman Sachs said.
In addition, Tim Cook's presentation at the Goldman Sachs Technology and Internet Conference on February 10 has increased Goldman's confidence in Apple's platform momentum, particularly on Apple Pay, the potential for the Apple Watch, and the prospects for sustained iPhone growth.
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"All of these factors and a powerful near-term catalyst lead us to increase our estimates and price target. Our scenario analysis reflects our increasingly bullish outlook, though the risk-reward has become somewhat less favorable. Given the current catalyst set and valuation, we still expect the stock to outperform," analysts noted.
Nevertheless, analysts said they could become more cautious on the stock if their base case assumptions prove "too aggressive," the stock price reaches their new target price, or they believe investor expectations have exceeded their base case. Goldman's EPS estimates for 2015/16/17 move to $8.77/$10.45/$11.56 from $8.51/$9.87/$10.84.