Apple (NASDAQ:) shares jumped nearly 2% in early New York trading on Thursday after Bank of America analysts raised the stock’s rating to Buy from Neutral.

Analysts also hiked the price target by $17 to $225 per share, reflecting higher iPhone and Services estimates.

A more bullish stance on Apple stock is supported by several factors, including: stronger multi-year iPhone upgrade cycle, higher growth in Services, strong capital returns, etc. Moreover, analysts believe that negative EPS estimate revisions are behind Apple.

The upgrade move comes as investor focus shifts towards the expected launch of Vision Pro next month, as well as AI-powered iPhone, which is expected to arrive in late 2024 or 2025.

The higher iPhone and Services estimates pushed EPS estimates above the Street by 7% and 4% for fiscal 2025 and 2026, respectively.

“In Services, we see traction with a broader installed base with several categories including advertising, and health & fitness,” analysts said in a note.

More precisely, BofA expects Vision Pro to “surpass iPad revs over time as spatial computing takes hold offering differentiated use cases driving services upside.”

The broker’s supply chain checks also showed higher iPhone production in December, which should be offset by potentially lower numbers in March.

Apple stock is down 5.1% year-to-date through Wednesday’s close.