..Analysts at RBC Capital Markets, today reiterated their Outperform rating on Apple Inc. (AAPL) while boosting their price target from $140 to $155. That new target suggests an 11.5% upside to the stock’s Tuesday closing price of $138.99.

From StockNews.com

In a note to clients, RBC said it has seen increased focus on AAPL’s services business during [the] last 12 months or so [and]...that the company...intended to double the business in the next four years. In fact, Apple projects a $48 to $50 billion revenue target for services by fiscal 2020.

While RBC believes the growth of its installed hardware base and replacement cycles remain key drivers for AAPL shares, its services model could provide several tailwinds, including:

1. A gross margin annual tailwind of 40-60bps,
2. Accelerated ARPU, as AAPL is better able to monetize their iOS platform and
3. Create a better valuation narrative for AAPL.

The firm also sees three big catalysts ahead for the company:

1. Capital allocation and cash repatriation,
2. iPhone 8 cycle and
3. Services tailwind.

Apple’s services segment include a host of offerings, such as:

• the App Store,
• AppleCare,
• Apple Pay,
• iCloud,
• and its various licensing sub-segments. The services segment is already the company’s fastest-growing unit, according to the latest earnings data, and AAPL expects that growth to accelerate in coming years.

Apple Inc. shares rose $0.26 (+0.19%) in premarket trading Wednesday. Year-to-date, AAPL has gained 20.53%, versus a 5.98% rise in the benchmark S&P 500 index during the same period.

AAPL currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 28 stocks in the Technology – Hardware category.