May 23, 2008 / 1:00 PM / 12 years ago

Goldman adds Apple to Americas conviction buy list

An Apple's iPhone is displayed following its introduction in Berlin September 19, 2007. REUTERS/Fabrizio Bensch

(Reuters) - Goldman Sachs added Apple Inc (AAPL.O) to its Americas conviction buy list, saying shares will likely benefit from the launch of the company’s third-generation iPhone next month, as well as from the sharply higher projections of iPhone sales for the second-half of the year.

Analyst David Bailey also raised his target on the stock to $220 from $185, and said Apple should be able to increase its available iPhone subscriber base by more than 80 percent this year due to aggressive expansion into international markets.

“We continue to expect Apple to beat its 10 million unit goal for calendar year 2008 driven by broader global distribution and the availability of third-party applications, which should keep Apple well ahead of the competition,” Bailey wrote in a note dated May 22.

Apple has signed deals to bring the iPhone to Singapore, India, Australia and the Philippines this year. Earlier this month, an Apple spokeswoman said the iPhone would make its debut in those countries “later this year,” but declined to comment on plans to bring the iPhone to Japan and China.

Bailey, who rates the stock “buy,” expects iPhone unit shipments to increase to 11 million in 2008 from 3.7 million in 2007.

“We also expect Apple to continue to drive Mac unit growth 3 times the PC market this year,” he added.

On Friday, theflyonthewall.com reported that Merrill Lynch had raised its price target on Apple stock to $215 from $186, and maintained its “buy” rating. Reuters could not immediately verify the report.

Apple shares rose nearly 3 percent to $181.68 in trading before the bell Friday. The stock has soared 42 percent in the past three months as investors regain confidence that Apple can sustain growth even in a weakening economy.

Reporting by Tenzin Pema in Bangalore; Editing by Himani Sarkar

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