According to Peter Misek an analyst at Jefferies, the bearish position of Apple Inc. (NASDAQ:AAPL) has finally seen an uplift. Misek gave the company’s stock a price target of $600, which is more than its previous price target of $450. The reasons for this increased rating are the announcement of Apple’s iPhone 6 and the improved margin of the company. Apple hopes to give its iPhone 6 a 4.8 inches screen.
Misek said that supplier of Apple have become very patient about the company’s competent pricing, which is very crucial to increase Apple’s gross margin. Earlier this year analysts were told by Apple suppliers that they would soon be in a favorable position to guide Apple about its prices, which would affect company’s margins. Apple’s profits depend heavily on providing economic parts that are safe because otherwise Apple has strict rules regarding retail pricing.
Analysts say that over 50% of the total smartphones sold in today’s mobile market have display screen more than 4 inches big, which is the current size of iPhone. By not introducing a display screen more than 4 inches yet, Apple has lost a major chunk of its market shares. Misek believes that investors would once again become interested in iPhone after the release of bigger display screened smartphone. Misek’s report was not all optimistic; he said that Apple is cutting down on its orders for iPhone 5c because of poor sales of the model. Misek believes that Apple might even end up cutting down the price of 5c to boost sales.
After Misek’s optimistic upgrading of Apple Inc. (NASDAQ:AAPL)’s target price and stock, the share of Apple went up on Monday. This will help improve Apple’s gross margin and boost business till the launch of iPhone 6.