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Three reasons Apple is Piper Jaffray’s top big stock pick

October 19, 2015, 11:08 AM UTC
Apple Unveils New Versions Of iPhone 6, Apple TV
SAN FRANCISCO, CA - SEPTEMBER 9: Apple CEO Tim Cook waves as he arrives on stage during an Apple Special Event on at Bill Graham Civic Auditorium September 9, 2015 in San Francisco, California. Apple Inc is expected to unveil latest iterations of its smart phone, forecasted to be the 6S and 6S Plus. The tech giant is also rumored to be planning to announce an update to its Apple TV set-top box. (Photo by Stephen Lam/ Getty Images)
Photograph by Stephen Lam — Getty Images

Apple is Piper Jaffray’s top large cap stock pick, senior analyst Gene Munster reported Monday. His note to clients is full of threes:

New products: The company is entering a holiday quarter with three of them—Apple Watch, Apple TV, and iPad Pro. “While new products in the Dec-15 quarter are well known to the Street,” he writes, “we do not believe they are reflected in Street numbers.”

Upgrade program: Munster estimates that three out of four U.S. iPhone customers will become annual upgraders by the end of 2018, up from 10% today.

The iPhone 7: He expects next year’s iPhone to be a more “revolutionary” device than the iPhone 6S. Three possible changes—a buttonless front panel, longer battery life, and an optional sapphire screen.

Munster is a long-time Apple bull best known for his repeated predictions that Apple would bring a television to market, which didn’t exactly come true. He’s more cautious these days, but his estimates are still higher than the Street’s. With Apple set to release fiscal fourth quarter results next week, he’s calling for earnings of $1.90 per share on revenues of $51.1 billion. His 12-month price target is $172 a share. Apple closed Friday at $111.04.

 

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

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