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Morgan Stanley is bullish on Apple

New York's Financial DistrictNew York's Financial District
The brass Wall Street bull statue in New York's financial districtPhotograph by Robert Nickelsberg — Getty Images

Why is Katy Huberty — writing for Morgan Stanley — so bullish on Apple right now? In a note to clients Thursday reiterating the stock’s “Best Buy” rating, she ticks off her reasons:

  • The Watch: “An important barometer of the company’s innovation capabilities under the leadership of Tim Cook.”
  • The iPhone: AlphaWise tracking suggests Apple shipped 57-58 million iPhones last quarter, well over the 54 million in Huberty’s model.
  • Stock buybacks: She expects Apple will announced a new cash return program Monday in the $130 billion to $150 billion range.
  • WWDC: News reports suggesting that Apple may be ready to announce a slew of new services, including streaming music and/or a new Apple TV set-top box with cable and broadcast TV content packages, an App Store, and/or HomeKit (allowing for integration with third-party smart home appliances).
  • New partnerships: For HomeKit, ResearchKit, Carplay and Apple Pay.
  • A strong replacement cycle: Huberty expects three out of four iPhone owners will buy new ones within two years.

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Long term, she writes, “Apple has the world’s most valuable technology platform, and is best positioned to capture more of their users’ time in areas such as health, cars and homes, as these platforms expand in the Internet of Things computing era.”

Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple (AAPL) coverage at fortune.com/ped or subscribe via his RSS feed.