JPMorgan analyst Samik Chatterjee initiated coverage of Apple (AAPL) with an Overweight rating and $272 price target. The shares closed yesterday down $1.77, or 1%, to $220.42.

The analyst’s price target implies 23% upside from current levels. While Apple’s leadership position in the premium smartphone market is well understood by investors, its “faster-than-expected” transformation to a services business, “stronger-than-expected” price increases in the core iPhone business and earnings growth from stock buybacks can drive “considerable upside” to current share levels, Chatterjee tells investors in a research note.

The analyst also believes Apple’s “robust” high-single-digit growth in the installed base, which he says is a key contributor to Services revenue growth, has been underappreciated by investors. 

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