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Buy Apple on 'services momentum' and next year's iPhone, Piper Jaffray says

Philippe Lopez | AFP | Getty Images

Investors should buy Apple shares as the market will look forward to 2017's iPhone and start to recognize the company's powerful services business, according to Piper Jaffray, which reiterated its overweight rating.

"Remains Top Pick ... [We are] buyers of AAPL based on our belief that shares will move higher as we approach the iPhone 10th anniversary release in the fall of 2017," analyst Gene Munster wrote in a note to clients Sunday.

"We believe the multiple on shares of AAPL will rise over the next two years as investors slowly appreciate the sustainability and profitability [of the] services business."

Apple is scheduled to announce fiscal fourth-quarter financial results Tuesday.

Munster's picks have an 18 percent one-year average return and a 66 percent success rate for a profit, according to analyst ranking service TipRanks. That places him in the top 1 percent of all Wall Street analysts covering any industry.