By Aaron Pressman
February 1, 2017

Apple’s stronger than expected financial results for its all-important holiday quarter on Tuesday prompted many analysts to raise their price targets for its stock.

The company’s record $78.4 billion in quarterly sales were up 3% from last year, beating the average analyst forecast of $77.3 billion. Quarterly profits per share of $3.36 were 8 cents better than last year and 14 cents higher than Wall Street’s expectations.

The results pleased investors and helped push Apple’s shares up 7% in afternoon trading on Wednesday to $129.33, the highest since July, 2015.

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And the strong results, along with positive signs about the company’s upcoming series of iPhone upgrades later this year, prompted some analysts to predict even more stock gains.

UBS analyst Steven Milunovich raised his price target on Apple shares to $138 from $127. After the stronger than expected growth in the past quarter, the total base of customers that could upgrade to the next iPhone is larger, the analyst said, giving him more confidence that the new model would be a hit.

“Based on the growing installed base and some recovery in upgrade rates, the iPhone 8 should result in double-digit (percentage) unit growth ,” he wrote on Wednesday.

Analyst Abhey Lamba at Mizuho raised the firm’s target on Apple (aapl) to $135 from $130, also looking ahead to the next iPhones.

“Management also indicated strong double-digit growth in the installed base as it capitalized on the issues at Samsung and attracted meaningful new users,” Lamba wrote, referring to the South Korean competitor’s recall of its dangerously fire-prone Galaxy Note 7 phone in September. “We like what we see and remain positive about the upcoming upgrade cycle opportunity given strong installed base growth.”

Cowen & Co analyst Tim Arcuri called his current price target of $135 “a veritable layup” with $145 to $150 now possible. Arcuri was also focused on the next iPhone update, which he dubbed the iPhone 10 owing to the device reaching its 10th anniversary this year. “Ultimately, this is really the last (quarter) that anybody is going to care about iPhone until the launch this Fall and it can be said that iPhone 7/7+ ‘did its job’ as a bridge to get to the super-cycle in 2017 for the iPhone 10,” he wrote.

Widely followed Bernstein Research analyst Toni Sacconaghi already had a relatively high target on $140 on Apple’s shares, and he did not change it after the earnings announcement. But he remained quite bullish, citing the growing number of people getting an iPhone for the first time, which should fuel future upgrade cycles.

Apple’s results “eclipsed consensus expectations slightly, but fundamental results were arguably even stronger,” he wrote. “Encouragingly, Apple continues to attract first time iPhone buyers – we estimate that China alone may have attracted 7-8 (million) first time iPhone buyers in the December quarter.”

Morgan Stanley’s Katy Huberty also previously had a relatively high target of $148, which she eased up to $150 after the results. The next iPhone, expected in the fall, is likely to come with some highly desirable improvements, she noted. “New OLED displays, improved battery technology, and a redesigned form factor at the high-end of the portfolio are likely to accelerate upgrade rates in FY18,” she wrote. “China will lead growth, in our view, and could account for all incremental iPhone shipments embedded in consensus models next year, even if the upgrade rate doesn’t accelerate from current lows.”

At Barclays, analyst Mark Moskowitz upped his target slightly to $123 from $117, but he remains one of the more skeptical observers, noting that Apple spent a lot of cash during the quarter buying back its own shares. Reducing the number of shares outstanding helped boost its earnings per share for the quarter above Wall Street’s forecast, he said. The company also included 14 weeks of results in the most recent quarter, one more than in the same quarter of 2015.

Another possible problem is smartphone owners increasingly opting for cheaper models and holding onto phones for longer, he noted. “We remain skeptical as Dec-Q results (adjusting for extra week) and company commentary do not change our view that mixing down by smartphone users and longer replacement cycles could result in a more subdued growth profile (i.e., single digits),” Moskowitz noted.

Goldman Sachs analyst Simona Jankowski also saw some signs of trouble, particularly falling iPad sales. The Apple tablet brought in $5.5 billion in the quarter, down 22% from last year, as Apple sold only 13.1 million iPad versus 16.1 million in 2015. Jankowski, who was expecting sales of 15.5 million iPads and revenue of $7.1 billion, maintained her $133 price target for the stock.

The Goldman analyst also noted CEO Tim Cook’s possibly signaling Apple’s desire to make a big splash by acquiring a major media or entertainment company.

“We think Apple needs to ‘go big’ on original content, which it could achieve through partnerships or acquisitions (content and/or content providers), and we believe management remains open to these options,” she wrote.

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