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Wednesday, April 18, 2012, 12:02 pm PT (03:02 pm ET)

Goldman Sachs ups Apple target to $750, expects 'solid' March quarter

Goldman Sachs on Wednesday increased its price target for Apple stock to $750, and has advised investors to buy in prior to next week's earnings report.

Less than a week before Apple is prepared to announce its earnings for the March quarter, analyst Bill Shope said he expects the report due next Tuesday afternoon to be "solid," with a likely upside. He hasn't been worried by recent volatility with the stock, which saw the company post its largest ever drop of 52 points on Monday.

He believes that Apple sold around 31.1 million iPhones in the quarter, along with 12.5 million iPads. Mac sales, he admitted, are likely to be "fairly lackluster," but he still believes his estimate of 4.3 million units and 14 percent annual growth is higher than Wall Street expectations.

While the March quarter is expected to be a positive, the company could be in even better shape for its current quarter, which concludes in June. It will mark the first full three-month span in which the new iPad is available, along with the reduced-price $399 iPad 2, as well as a fully ramped distribution channel with the iPhone 4S.

"In other words, the June quarter is when many of the recent catalysts begin to fully manifest into earnings power," Shope wrote in a note to investors, attempting to dispel concerns that the June quarter could be "catalyst-light."

Product lineup


He also expects Mac sales to rebound quickly over the coming months, as Apple is expected to revamp its product lineup with new laptops and desktops. In particular, Apple is widely believed to be preparing a redesigned lineup of its MacBook Pro notebooks, making them thinner and lighter, and also equipping them with Intel's latest Ivy Bridge processors.

The March quarter will be "the beginning of a very big year," in Shope's eyes, which has led Goldman Sachs to increase its price target for AAPL stock to $750, up from its previous prediction of $700.