Apple (NASDAQ:AAPL) had a monster year in 2019. The shares nearly doubled -- up 86% -- as the consumer tech giant regained Wall Street's market-cap crown. A breather may seem natural at this point. It's not as if Apple is nearly twice the company it was a year ago, and its business certainly isn't appreciating at the clip of its ascending stock price. However, one analyst thinks that the rally isn't over. 

Tom Forte at DA Davidson is kicking off the new trading week by lifting his price target on Apple shares from $300 to $375. His revised price goal is now the loftiest among his peers, taking out the previous Street high of $360. He's naturally sticking to his bullish buy rating.

An iPad informational class being conducted at an Apple Store.

Image source: Apple.

The case for $375

A stock that nearly doubles over the past year is obviously doing a lot of things right, and it's not a surprise to see Wall Street pros chasing the market darling with higher price targets. Forte's goal of $375 may have seemed outrageous a year ago when Apple stock began 2018 priced just above $155, but it's not a tall order with the stock now above $300. Forte's price target suggests just 21% of upside from current levels.

Forte's rosier outlook stems from updating his model. He now sees Apple's long-term adjusted EBITDA margin clocking in at 35%, well ahead of the 27% mark it scored in fiscal 2019. He concedes that the past year wasn't perfect, with iPhone unit sales actually declining, but he feels the next couple years of smartphone models will see an uptick in activity as wireless carriers roll out 5G availability. He's also bullish on the company's ability to keep beefing up its growing services revenue in areas including financial services, proprietary content, and healthcare -- categories that Apple has fortified in recent months with the Apple credit card, November's launch of Apple TV+, and improved tracking and health-monitoring features of its latest smartwatch and smartphone products. 

Apple may not seem at its best right now looking back. Revenue has declined in two of the past four fiscal years, including a 2% dip in fiscal 2019. There's been just one year of double-digit percentage growth on the top line in that time, and Apple's trailing revenue is just 11% higher than it was four years ago. Margins are also lower than they were four years ago, but the tech titan's aggressive share buybacks have helped prop up profits on a per-share basis. The silver lining here is that Apple has been able to diversify its revenue streams in that time, but it's still a company that lives and dies by the iPhone. 

Apple shares reaching $375 apiece would imply an enterprise value of $1.65 trillion for the iconic tech stock. It would price the stock at 28 times analysts' earnings forecast for this fiscal year and a still-steep multiple of 25 if we look out to fiscal 2021. The key to the multiple expansion for a stock that routinely trades at forward P/E ratios in the teens is the push into new services that would provide steadier growth at potentially higher margins. Apple's knack for bar-raising innovation will also only help. Apple at $375 doesn't seem crazy given the stock's momentum and near-term catalysts, but don't expect the shares to nearly double again in 2020.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.