Apple will generate significant profits and sales growth over the next three years, according to one Wall Street firm.
D.A. Davidson initiated coverage for Apple shares with a buy rating, citing the company's leadership position in the smartphone market.
"With an eye for design, strong share in the premium (high margin) markets for smartphones and a growing (but select) number other devices, and the most valuable global brand, Apple remains one of the most significant technology companies in the world," analyst Tom Forte wrote in a note to clients Monday. "While the company faces a number of significant challenges, including the continued rise of Amazon and Google, its high margin and large sales figures enable the company to generate significant free cash flow, which it increasingly returns to shareholders via buybacks and dividends."
Forte started his price target for Apple shares at $220, representing 33 percent upside to Monday's close.