Believing that Apple investors “still underestimate the earnings potential” of the world’s biggest technology company, Morgan Stanley has upped Apple’s price target by almost 40%, from $515 to $720, as its share price continues to increase on the back of its new iPad and rumoured new Mac and iPhone products.

Analyst Katy Huberty identified a number of earnings drivers that would indicate growth in Apple shares, citing enterprise tablet adoption and a strong interest in upgrading to a new LTE-equipped iPhone which could be introduced later this year.

Speculation surrounding a new 4G-enabled iPhone has increased after the company introduced its new LTE-equipped iPad, suggesting the company would do the same for its upcoming smartphone. Verizon Wireless CTO David Small has also added fuel to the fire by stating that the operator will only release 4G LTE-equipped devices through to the end of 2012.

Tech Chief David Small spoke about the company’s handset plans following Verizon’s recent 4G outage, which was caused by network updates as the operator looks to expand its LTE networks.

Given that Verizon is one of Apple’s main US partners, it would indicate that the Cupertino-based company is lining up such a device to hit later this year.

Apple’s share price is already up 2.45% to $582.04 this morning, following the company’s announcement earlier today that the new iPad will go on sale in stores at 8am on Friday.