An Apple Inc. logo sits on display above the entrance to the company’s store in Barcelona, Spain. (Photographer: David Ramos/Bloomberg)

Apple Advances Most in Five Weeks Ahead of Annual Product Launch

(Bloomberg) -- Apple Inc. rose the most in five weeks on heavier-than-average volume as investors piled in on the eve of the company’s annual iPhone introduction.

The shares rallied 2.5 percent Tuesday, increasing the gain since the start of the year to 32 percent. More than 35 million shares changed hands, which is 1.4 times the three-month average. The company is expected to unveil three new iPhone models in Cupertino, California on Wednesday.

Apple Advances Most in Five Weeks Ahead of Annual Product Launch

The three new models Apple is expected to introduce this week will likely boost Apple’s average smartphone price by 5.4 percent year-over-year to $793 in fiscal year 2019, according to Goldman Sachs Group Inc’s analysts. The average iPhone price increase will be important for the company that’s seeing its smartphone unit growth stall.

Optimism over the expected growth in the iPhone’s average price pushed UBS Group AG’s Timothy Arcuri to lift his 12-month price target to $250, which implies about a 12 percent rally from its current level. Apple still has “ample dry powder” as the top underweight among active managers, Arcuri said in a note to clients. Latest carrier checks showed a significant reduction in store inventories for the iPhone, which is "extremely positive" , Keybanc’s John Vinh wrote in a note last week.

A trade war remains a major headwind for a company that produces parts of its iPhones in Asia. Proposed U.S. tariffs on $200 billion worth of products imported from China will raise prices for products like the Apple Watch and AirPods headphones, the company said this month.

©2018 Bloomberg L.P.