UBS raises Apple price target to $700, expects significant user upgrades for 'iPhone 6'

Analyst Steven Milunovich issued a note to investors, a copy of which was provided to AppleInsider, revealing the price target increase from its previous level of $625. The new $700 target comes as Milunovich is increasingly confident that iPhone sales in the U.S. will be particularly strong for Apple's so-called "iPhone 6," expected to debut later this year.

The analyst cited survey data from YouGov.com that suggested more than half of all U.S. iPhone users are due for an upgrade over the next 10 months. As a result, Milunovich believes that a number of iPhone 4 and iPhone 4S owners skipped the iPhone 5 and iPhone 5s upgrade cycle, and may be holding out for Apple's next-generation model.

Apple's next iPhone is rumored to come with a larger screen in two sizes of 4.7 and 5.5 inches. Milunovich believes those phones, along with the potential for an Apple-built wearable device, are good reasons for investors to buy in to AAPL stock.

"Investor sentiment has been somewhat apathetic as reflected by two-thirds of funds owning Apple being underweight," he wrote. "That view may change starting next week."

Next week, of course, is Apple's Worldwide Developers Conference, where the company is expected to announce the next major updates to its iOS mobile operating system and OS X Mac platform. New iPhones are expected to follow later this year, likely around September.

The old UBS price target of $625 went underwater earlier this week as Apple eclipsed it. The higher $700 target from UBS also comes after Barclays increase their own price target to $655 on Wednesday.

Other prominent analysts tracked by Apple do remain underwater, including Maynard Um of Wells Fargo, who has a "valuation range" of between $515 and $585 for Apple, and Rod Hall of J.P. Morgan, who maintains an overweight rating with a target of $623. Shares of Apple are up again on Thursday as of early afternoon trading, as Wall Street appears to be warming up to