Buy Apple on strong iPhone upgrades: Analyst

Customers take a selfie as they enter the first Apple Store in Mexico City, Mexico.
Ginnette Riquelme | Reuters

Investors should buy Apple shares as a proprietary survey of iPhone users shows strong upgrade demand over the next two quarters, according to Bank of America Merrill Lynch, which reiterated its buy rating.

"Survey indicates iPhone 7/7+ likely to exceed iPhone 6 in F1H17 in the US," Bank of America analyst Wamsi Mohan wrote in a note to clients Wednesday.

"Our US survey results (1000+ respondents across various demographics) show that regular upgrade appetite remains strong, many phones are becoming eligible for upgrade in the F1H17, and that attach rates for other products/services remain healthy," he wrote.