JP Morgan raises Apple price target to $145, forecasts sales of 26M Apple Watches this year

Analyst Rod Hall issued a note to investors Wednesday, a copy of which was provided to AppleInsider, in which he moved his December 2015 price target up $5 to $145. The increase comes alongside J.P. Morgan's first forecast for the Apple Watch, in which its "central case" sees the company selling 26.3 million units in calendar 2015.

Hall's estimates are based on the forecast that there will be 400 million potential Apple Watch customers by the end of the March quarter, just before the launch of the new wearable device. Because it requires an iPhone for use, the Apple Watch is limited to owners of the iPhone 5 and newer.

The sales forecast calls for the Apple Watch to be on the wrists of 5 percent of compatible iPhone owners before the end of the year.

Assuming that the "sport" version of the watch will be by far the most popular model, representing a projected 95 percent of sales, Hall predicts the device will net Apple 39 percent margins.

But if the stainless steel version of the Apple Watch or the gold "Edition" model prove more popular than Hall expects, he admitted his margin projections could prove conservative.

The projected financial impact of the Apple Watch also led Hall to increase is fiscal year 2015 earnings per share forecast by 2.4 percent to $9.21.

Hall predicts that Apple Watch growth will accelerate in 2016, when he sees penetration reaching 13 percent of compatible iPhone users by the end of the year. For fiscal 2016, he has raised his earnings per share forecast by 10.4 percent to $10.50.

J.P. Morgan's increased price target comes a day after shares of Apple closed at an all-time high of $122.02. Apple also finished trading on Tuesday with a record breaking market capitalization of $710.74 billion —  the largest closing value ever for any U.S. company.

Calling Apple "the most attractive large cap" in its coverage, J.P. Morgan has reiterated its "overweight" rating on the iPhone maker.