Even after an impressive 32-percent year-to-date gain, a major Wall Street firm came out bullish on Apple, Inc. (NASDAQ: AAPL) Thursday and said there are simply too many positive catalysts for the stock to ignore.

The Analyst

JPMorgan analyst Samik Chatterjee has initiated coverage of Apple with an Overweight rating and $272 price target.

The Thesis

According to Chatterjee, there are six reasons to love Apple:

1. Apple is transitioning from a hardware company to a services company faster than Wall Street anticipated.

2. Apple is demonstrating more pricing leverage in its core iPhone business than expected.

3. The market isn't fully appreciating Apple’s revenue growth opportunity within its current installed base.

4. Apple’s innovation allows the company to continue to disrupt new markets.

5. Apple can boost its earnings growth via its aggressive buyback initiative.

6. Apple’s pricing balance sheet and massive cash position give it financial flexibility to either pursue M&A deals or ramp up capital returns further.

Apple’s rebirth as a services company is central to Chatterjee’s bullsh thesis. Apple’s services revenue accounted for just 8 percent of total revenue as recently as fiscal 2012, but it now represents roughly 22 percent of total revenue.

“We forecast +23% revenue CAGR for Services (including comfortably hitting the FY20E Services revenue target of $48bn) with modestly better than company-wide margins to be accretive to profit growth, and accompanied by higher visibility to revenue and earnings, which we believe warrants a higher earnings multiple relative to the core hardware business,” Chatterjee wrote in the note.

He's particularly optimistic about the opportunities in Apple Music and Apple Pay, which are closely tied to the broad trends of streaming music and digital payments.

Price Action

Apple stock traded higher by 1.8 percent Thursday morning to $224.57.

Related Links:

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