Goldman: Apple to surge 40% on iPhone upgrades

Apple Inc. iPhone 6s Plus smartphones are displayed after a product announcement in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images

Goldman Sachs gave clients three reasons Tuesday morning why Apple shares may rally by more than 40 percent over the next 12 months.

A new analyst for the firm, Simona Jankowski, initiated coverage on the world's largest company by market value with a 'buy' rating, taking the reins from previous analyst Bill Shope. Jankowski built up a great track record with her coverage of other technology companies as her picks averaged a one-year return of 11.7 percent, according to TipRanks.com.

Her price target of $163 is also much higher than the Wall Street consensus of around $145, according to FactSet. It was trading at $113.20 on Tuesday morning.

Here are the three reasons:

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