BofA Securities analyst Wamsi Mohan raised the price target on Apple (NASDAQ: AAPL) to $340.00 (from $320.00) while maintaining a Buy rating, saying with an iPhone installed base nearing 1 billion units they see significant upgrades.

Mohan highlighted the following points about the installed base:

(1) size of the global iPhone IB of about 1bn units at the end of 2019 (about 720mn primary and 275mn in the used iPhone IB),

(2) total iPhone IB CAGR over the past 2 years is 9%, primarily driven by strong double-digit growth in the used iPhone IB (2-year CAGR of 22% y/y, albeit off of a small base), while the new iPhone installed base has grown at a mid-single digit CAGR (5% y/y),

(3) future growth in IB will largely come from the used phone market while the new iPhone IB remains flat to slightly down (assuming conservatively no switchers to new iPhones),

(4) a larger installed base can eventually drive higher consumption of services and sales of incremental devices (halo effect),

(5) secondary market growth presents a large services opportunity.