Apple Stock Gains After Price Target Raised At J.P. Morgan

Apple Inc.'s stock gained 0.3% in premarket trade Wednesday, after J.P. Morgan raised its price target and profit outlook on expectations of a strong Apple Watch release. Analyst Rod Hall's year-end target moves up to $145, or 19% above Tuesday's closing price of $122.02, from $140. He lifted his 2015 earnings-per-share estimate by 2.4% to $9.21 and his 2016 forecast by 10% to $10.50. Hall believes the base of users who own Apple Watch compatible models, such as the iPhone 5 or newer models, will be 400 million at the end of March 2015, rising to 525 million at the end of 2015 and to 627 million by the end of 2016. He expects 5% penetration of this user base in 2015 to 26.3 million units, and 13% penetration in 2016. The stock has run up 11% over the past three months, to become the first U.S. company to top $700 billion in market capitalization, while the S&P 500 has gained 1.4%.

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